The Currency (Part One)

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ARTICLE 1
(a) The Unit of Iranian Currency is the Rial. One Rial is equal to one
hundred Dinars.
(b) One Rial is equal to 0.0108055 (zero point zero one zero eight zero five
five) gramme of fine gold.
(c) Changes in the parity of the Rial in relation to gold shall be effected
upon the recommendation of Bank Markazi Iran, the agreement of the
Minister of Finance, the approval of the Council of Ministers, and the
ratification of the Finance Committees of the Houses of Parliament.
(d) The parity of foreign currencies in relation to the Rial, as well as the
buying and selling rates of foreign exchange, shall be computed and
determined by Bank Markazi Iran in compliance with the country’s
obligations towards the Intonations Monetary Fund.

ARTICLE 2
(a) The Currency of Iran shall be in the form of notes and coins.
(b) Only such notes and coins as are in circulation at the time this Act is
passed, or are issued thenceforth under the provisions of this Act, shall
have currency and be legal tender.
(c) The settlement of any committed indebtedness or liability can only be
effected in the currency of the country, unless other arrangements are
made between debtor and creditor in conformity with the Foreign
Exchange Regulations of the country.
(d) Gold coins shall not be legal tender.
(e) Regulation concerning the import and export of gold and silver shall be
effective upon the recommendation of the Governor of Bank Markazi Iran, the agreement of the Minister of Finance and the approval of the Council of Ministers.
(f) The denomination, form, material, colour, size, design and other
specifications of notes and coins in circulation shall be determined
upon the recommendation of the Governor of Bank Markazi Iran and
the approval of the Minister of Finance, with due regard to the
provisions of this Act. The quantity of the coins shall be determined
upon the recommendation of the Governor of Bank Markazi Iran and
the agreement of the Minister of Finance.
(g) Notes shall bear the signature of the Minister of Finance and the
Governor of Bank Markazi Iran.

ARTICLE 3
(a) The Government is the sole authority having the right of issuing notes
and coins and this right is hereby vested exclusively in Bank Markazi
Iran Subject to the provisions of this Act.
(b) The maximum value to which coins may be used in the discharge of
debts, as well as the manner in which notes and coins are called in and
the conditions under which they are withdrawn from circulation shall
be determined by Bank Markazi Iran, subject to confirmation by the
Currency and Credit Council and the approval of the Minister of
Finance, and shall be communicated to the public through the official
Gazette, at least one of the mass-circulation daily papers of the Capital,
and the radio and television networks.

ARTICLE 4
(a) The obligation of Bank Markazi Iran in respect of issued notes and
coins shall be restricted to the payment of value in the currency of the
country.
(b) Bank Markazi Iran shall not be liable or responsible in any manner for
any theft, loss, or destruction of notes and coins held by the public.
(c) Bank Markazi Iran shall, for a period of no less than ten years, replace
with current notes and coins the notes and coins which are withdrawn
from circulation according to Section b of Article 3 of this Act and
which are no longer legal tender. Upon the expiry of the said period,
Bank Markazi Iran shall have no obligation to replace such notes and
coins and the value of notes and coins by then not presented to Bank
Markazi Iran for replacement shall be credited to the account of the
Treasury.

ARTICLE 5
(a) Bank Markazi Iran shall at any time have at its disposal the following
assets, as not cover, equivalent to one hundred per cent of the notes
issued:
1- Gold, according to Article 6.
2- Foreign exchange, according to Article 7.
3- Securities and bonds according to Article 8 and 9.
(b) The sum total of the assets referred to in Subsections 1 and 2 of Section
(a) of this Article shall at no time fall below 25 per cent of the total
value of the liabilities of Bank Markazi Iran on account of the notes
issued.
NOTE
The assets referred to in this Article shall be valued at purchase price if
such price is lower than nominal value, or at nominal price if purchase price is
higher than nominal value.

ARTICLE 6
Gold assets referred to in Subsection (1) of Section (a) of Article 5 shall
consist of:
(a) Gold bullion, gold coins in the Bank vaults, and gold deposited with
foreign banks and international institutions;
(b) Gold delivered under relevant statutes to the International Monetary
fund, the International Bank for Reconstruction and Development and
similar or affiliated institutions as quota or subscription.

ARTICLE 7
The foreign exchange assets, referred to in Subsection (2) of Section (a) of
Article 5, shall (with due regard to the Note forming part of this Article) consist of:
(a) Convertible foreign bank-notes, acceptable to Bank Markazi Iran;
(b) Foreign exchange claims falling due in not more than six months;
(c) Any payments made under relevant statutes to the International
Monetary Fund, the International Bank for Reconstruction and
Development and similar or affiliated institutions as quota or
subscription;
(d) Securities issued or guaranteed by official international organizations
or their affiliates;
(e) Securities issued or guaranteed by foreign governments;
(f) Claims on foreign countries, in foreign exchange or Rials convertible in
to foreign exchange, acquired through the implementation of
international agreements for payment and/or barter, within the limits
provided in such agreements;
(g) Commercial bills in convertible foreign exchange, falling due in not
more than six months, drawn on foreign persons, natural or legal,
bearing three first class signatures, one necessarily that of the ceding
bank;
(h) Foreign bills and securities convertible in to currencies acceptable to
Bank Markazi Iran;
(i) Special Drawing Rights holdings with the International Monetary
Fund, in accordance with the relevant laws.
NOTE
Foreign exchange, bills, and foreign exchange claims referred to in this
Article shall be in convertible currencies acceptable to Bank Markazi Iran.
ARTICLE 8
Government bills and securities referred to in Subsection (3) of Section (a)
of Article 5 shall consist of:
(a) Treasury Bills and Bonds issued by the Government or guaranteed by
the ministry of Finance, provided legal authorization is obtained for
their issuance or guarantee;
(b) Bank Markazi Iran’s claims on Ministries, government agencies and
municipalities and on agencies affiliated to the Government and/or
municipalities operating on a commercial basis, provided such claims
are guaranteed by the ministry of Finance.
NOTE
The Crown Jewels, as set forth in the Act dated 25th Aban 1316, shall be
collateral for all undertakings resulting from the implementation of this Article.
Bank Markazi Iran is charged with the keeping and protection of the Crown
Jewels, which may only be used in accordance with the provisions of this Act and
under the supervision of the Note-Reserve Control Board.

ARTICLE 9
Non-government securities referred to in Subsection (3) of Section (a) of
Article 5 shall consist of:
(a) Transferable commercial bills in rials bearing three first class
signatures one necessarily that of the ceding bank, falling due within
one year;
(b) Other short-term claims in rials secured by gold bullion or coins or
other assets referred to in Article 7 falling due within one year.

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3 thoughts on “The Currency (Part One)

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