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Iran is to shift its foreign currency reserves
from dollar to euro and use the euro for oil deals in response to
US-led pressure on its economy.
In a widely expected move, Tehran said it would use the euro for all
future commercial transactions overseas.
The US, which accuses Tehran of supporting terrorism and trying to
obtain nuclear weapons, has sought to limit the flow of dollars into
Iran.
It wants the United Nations Security Council to impose sanctions on
Iran.
Dollar squeeze
Analysts said Tehran had been steadily shifting its foreign-held
assets out of dollars since 2003 and that Monday's announcement was
unlikely to affect the value of the dollar, which has weakened
significantly in recent months.
There will be no reliance on dollars
Gholam-Hussein Elham, Iranian spokesman
An Iranian spokesman said all its foreign exchange transactions
would be conducted in euros and its national budget would also be
calculated in euros as well as its own currency.
"There will be no reliance on dollars," said Gholam-Hussein Elham.
"This change is already being made in the currency reserves abroad."
The currency move will apply to oil sales although it is expected
that Iran, the world's fourth largest oil producer, will still
accept oil payments in dollars.
Nuclear trigger
Washington has sought to exert financial pressure on Iran, which it
accuses of flouting international law by trying to acquire nuclear
weapons.
Tehran denies this, saying its nuclear research is for purely geared
towards civilian uses.
Most international banks have stopped dollar transactions with Iran
and some firms have ceased trading with Iran altogether in
anticipation of possible future sanctions.
The dollar slipped slightly against the euro in New York trading
although analysts said they did not expect the reaction to be too
severe.
"It is something they have been saying they are going to do for
quite a long time now, so I wouldn't expect any market reaction,"
said Ian Stannard, an economist with BNP Paribas.
The BBC's Tehran correspondent Frances Harrison said Iranian
businessmen were complaining about delays in securing letters of
credit and saw current conditions as a prelude to the imposition of
sanctions.
Tehran has urged Iranian businesses to open letters of credit in
euros in the future.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/6190865.stm
Published: 2006/12/18 16:59:30 GMT
© BBC MMVIII
