Iran announces switch from dollars to euros

From Agence France-Presse
Monday, December 18, 2006

http://news.yahoo.com/s/afp/20061218/wl_mideast_afp/iranforexbank_061218...

Iran announced it has ordered the central bank to use euros for foreign transactions and transform the state's dollar-denominated assets held abroad into the single European currency.

"The government has ordered the central bank to replace the dollar with the euro to limit the problems of the executive organs in commercial transactions," government spokesman Gholam Hossein Elham told reporters Monday.

"We will also employ this change for Iranian assets (in dollars) held abroad."

Elham implied that the move would apply to oil revenues from the world's No. 4 crude producer, although it remains to be seen how this would be received by the market.

"Foreign income sources and oil revenues will be calculated in euros and we will receive them in euros in order to put an end to our dependence on the dollar," Elham said.

The move comes amid mounting pressure from the United States for the UN Security Council to agree sanctions against Iran over its controversial nuclear programme.

Bankers in Iran have complained in recent weeks that it was becoming increasingly difficult to receive Iranian-held money denominated in dollars from European bank accounts.

They said that this was because of US pressure on European banking giants not to allow dollar-denominated funds to be sent into, or out of, the Islamic republic.

Elham added that Iran's budget would in future be calculated in euros.

"Until now the budget has been calculated according to revenues in dollars, but this calculation will now change," he said.

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