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Iran will no longer use US dollar in foreign trade transactions

Monday April 23, 2018 8:31 PM, News Network

Iran dumps dollar for Euro

Tehran: As part of its years-long effort to reduce reliance on US currency amid a deepening standoff with Washington, Tehran has announced it will start reporting foreign currency amounts in euros rather than dollars.

The latest announcement by the Iranian government came five days after its central bank had said that it will dump the dollar and “manage” its local currency using primarily the euro. The reports earlier last week also said that President Hassan Rouhani and his cabinet decided Wednesday that the euro will also be used when giving the rial’s exchange rate in all official statements and accounts, according to Bloomberg.

The governor of Iran’s central bank (CBI) Valiollah Seif now said that Supreme Leader Ayatollah Ali Khamenei had welcomed his suggestion of replacing the dollar with the euro in foreign trade, as the “dollar has no place in our transactions today.”

The new policy could reportedly encourage government bodies and firms linked to the state to increase their use of the euro at the expense of the American currency. France will start offering euro-denominated credits to Iranian buyers of its goods later this year to keep its trade out of the reach of US sanctions, said the head of state-owned French investment bank Bpifrance, according to RT.

Tensions between the Islamic Republic and the U.S. have spiked since the beginning of the Trump presidency, which wants to roll back Iranian influence in the Middle East with the assistance of America’s Gulf Arab allies. President Donald Trump has set a May 12 deadline for his decision whether to pull out of the 2015 nuclear deal that allowed Iran’s economy to re-engage with world trade. European powers want to preserve the accord.

Last month, Tehran announced that purchase orders by merchants that are based on US currency would no longer be allowed to go through import procedures. The step followed an official request by the CBI and was specifically meant to address fluctuations in market rates of the US dollar.

The Iranian currency has lost almost half of its value on the free market since last September. The rial has plunged to a record low of about 60,000 against the dollar before authorities set a fixed rate of 42,000 and warned Iranians they would face penalties for using other rates.

Khamenei blamed foreign enemies for the “recent issues in the currency market” and asked Iran’s intelligence services to defuse the plots against the Islamic republic.

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