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Iran: Euro to replace dollar as oil currency

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  • Iran: Euro to replace dollar as oil currency

    In July Iran will ditch the dollar in favour of the euro as the currency in which it will accept payments for its oil and natural gas exports, Iranian president Mahmoud Ahmadinejad announced Friday.

    The switch, first mooted months ago, was expected but Ahmadinejad's decision comes just as Washington is stepping up pressure on other United Nations Security Council members to act against Tehran for flouting agreements taken with the UN's nuclear watchdog.

    Ahmadinejad's announcement, made in Baku, Azerbaijan where the Iranian leader is attending a regional economics conference, appears aimed at weakening the United States' resolve to seek sanctions against Iran if it does not comply with the UN International Agency for Atomic Energy's demands.

    Some observers beleive the Iranian move could deal a severe blow the the American currency as many central banks from oil importing nations could choose to stock up their currency reserves with euros rather than dollars.


  • #2
    There is a discovery underway to wean off America from dependency on Middle East oil. The discovery may be announced in two years time, but the adjustment may take some more years. Within ten years, countries that depend on its oil reserves and revenue may be hit hard unless diversification is pursued by now. Because fossil oil will occupy less importance when this 'new' oil is discovered in America.

    "Unless you are 'born' again, you can never get into the kingdom of God" (John 3:3).


    • #3
      TEHRAN, June 5 (UPI) -- The Iranian Oil Bourse is in its final stages, Iran's Fars news agency reported Monday.

      According to the Fars report, the board of directors of the International Bourse Co., which is charged with establishing the bourse, will review the final draft of the articles of association of the Iranian bourse this week.

      The International Bourse Co. was registered last month, with an initial capital of $2,000, and is charged with setting up the Iranian Oil Bourse on Kish Island. The IBC is owned by the National Iranian Oil Co., which has an 80 percent stake, and by with Kish Free Zone Organization and the Mostaz'afan and Janbazan Foundation, each of which hold 10 percent stakes.

      Once the IBC finalize the draft, the articles of association will be sent to the body in charge of securities for review.

      The bourse will be established in phases; following discussions of the first phase, rules and bylaws involving the establishment, running, equipping and opening of the bourse will be negotiated.

      Iranian Oil Bourse nearly ready to open


      • #4
        TEHERAN - Iran said on Tuesday it was reducing dollar-based transactions to a minimum in response to US curbs on Iranian banks amid rising tension over the Islamic republic’s nuclear programme.

        “We will carry out our foreign currency transactions with currencies other than the dollar and our use of the dollar will reach a minimum level,” Economy Minister Davoud Danesh Jafari was quoted as saying by student news agency ISNA.

        “Some US banks have been disrupting our dollar transactions for a long time and Iran, in return, has been decreasing its dependence on the dollar,” he added, without elaborating.

        The move comes after the US Treasury Department in September announced that it had barred Iran’s state-run Bank Saderat from having any links with US-owned banks because of its “support for terrorism”.

        The United States cut diplomatic relations with Iran in the wake of the Islamic revolution in 1979 and also slapped an almost wholesale trade embargo on the country.

        Tensions are rising once more over Iran’s nuclear programme, which the United States alleges is cover for a drive to acquire atomic weapons, a charge vehemently denied by Teheran.

        According to Iranian banking sources, several top European banks are now also refusing to carry out dollar-based transactions to and from Iran, or to open credit lines for Iranians in dollars for fear of facing US penalties.

        This has pushed Iranian businesses to use other foreign currencies or apply through costly and time-consuming procedures at smaller banks, an Iranian exports bank official in charge of foreign currency transactions told AFP.

        “The outcome of this US political move is that Iran is now regarded as a risky country and no big bank would grant loans and financial facilities under such unstable conditions,” the bank official said on condition of anonymity.

        “This would obviously impose great losses on our banks in Iran as well as those importers or exporters that have to deal with foreign banks,” the official said.

        One Iranian private bank is openly encouraging customers to replace dollars in money transfers from and to Europe.

        “Dollars are not being transferred by European banks for now. So, customers should better use the euro or sterling,” the bank’s official in charge of international affairs told AFP, also declining to be named.

        A money-changer said businesses are going through repeated money exchanges from rial to dollar via other currencies outside Iran because the dollar is the only acceptable option in some deals.

        “The normal European banks have cut down on deals with Iran over the past month, therefore we used Asian banks to execute our transactions, even with a high commission,” said the money-changer.

        “Some Iranian businessmen with dual nationality have opened new accounts as foreign citizens to keep their money transactions alive in those banks,” he said.

        Iran’s foreign current account surplus was estimated at 8.15 billion dollars in 2005, a Business Monitor International report said.

        Iran cuts dollar-based transactions to “minimum”


        • #5
          TEHRAN, Dec. 4 (Mehr News Agency) – Iran has decided to replace dollar with euro in its foreign trade given the continual impediments and hostile policies directed by U.S. toward the country, Iranian finance minister said on Monday.

          According to ISNA, the would-be decision is also more attuned to existing trade volume between Iran and European nations, the country's major economic partners, which is transacted through the 'euro banks'. "Such inclination has been underlying part of our economic policy for awhile and our Oil Stabilization Fund (OSF) in dollar is at its lowest now," Davud Danesh-Jafari continued.

          Back in September, the head of the Central Bank of Iran (CBI) Ebrahim Sheibani had threatened that Iran would resort to dollar-to-euro conversion if the U.S. pressure continued. Moreover, the 9/11 event seemed to consolidate a tentative unanimity being formed on this matter among Iranian statesmen after the emergence of euro in 2000.

          Experts believe that less reliance on dollar and conversion to euro may increase Iran's financial flexibility and access to euro accounts would be easier if the U.S. chooses to impose a unilateral economic sanction on the country.

          Iran to replace dollar with euro in foreign trade: Finance Minister


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