TEHRAN – The Central Bank of Iran plans to issue 200,000-rial and 500,000-rial banknotes, the Mehr News Agency quoted the central bank official Majid Saniei as saying.
Currently, 100,000-rial banknotes are the highest denomination currency in the country.
The society is in need of such high denomination banknotes, the official said.
The administration of Iranian President Mahmoud Ahmadinejad may face up to 171 trillion rials (about $13.8 billion) deficit for paying cash subsidies in line with the subsidy reform plan in the current Iranian calendar year which ends on March 20, according to media reports.
During the first half of the current year, the administration faced 47.701 trillion rials (about $3.8 billion) deficit. If the same situation continuous, its budget deficit will amount to 171 trillion rials.
Nearly 74.5 million Iranians receive cash subsidies.
The government implemented the first stage of the subsidy reform plan towards the end of 2010 in an attempt to wean the country off food and fuel subsidies. At the time, Ahmadinejad called it the “biggest economic plan of the past 50 years”.
It allows the government to gradually slash subsidies on fuel, electricity, and certain goods over the course of five years, with low-income families being compensated with direct cash handouts.
Source: Tehran Times