Iran's cabinet has endorsed a plan to slash four zeros from the national currency, pending parliamentary and Constitutional Council approval.

Government spokeswoman Fatemeh Mohajerani said on Sunday that the decision, approved during a cabinet meeting in Tehran, follows last week's approval by the Iranian parliament’s economic commission.

Speaking to reporters, Mohajerani clarified that the currency will remain the rial, subdivided into the gheran, and the transition will be gradual, with both the current and new denominations circulating for a period.

Shamseddin Hosseini, chairman of the parliament's economic commission, said the reform aims to simplify financial transactions, noting that one rial would be valued at 10,000 of its current unit and split into 100 gherans.

Currently, 1 U.S. dollar is equal to nearly 40,000 Iranian rials at the official rate, but trades for more than 90,000 rials on the free market.

The proposal still requires parliamentary endorsement and clearance from the Constitutional Council before implementation.

Iran’s currency has faced steep depreciation since the U.S. withdrawal from the 2015 nuclear deal in May 2018 and the subsequent reinstatement of sanctions, which have strained the country’s economy.

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