Iran’s Currency Reserves Shift from Dollar to Euro

TEHRAN (Fars News Agency)- Iran is to shift its foreign currency reserves from dollars to euros 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 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.

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.

Iranian government 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. Yet, Tehran has urged Iranian businesses to open letters of credit in euros in the future.

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 civilian uses.

Most international banks have stopped dollar transactions with Iran.

The dollar slipped slightly against the euro in New York trading although some analysts said they expect the reaction to be too severe.

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