Iran Officially Replaces US Dollar With Euro in Int’l Transactions

The Iranian government has decided to replace the US dollar with euro in its international transactions. The decision was taken in a cabinet meeting as the government tries to manage the exchange rates and support the plunging rial.

“All ministries, governmental organizations and firms are obliged to choose euro as the main currency used in reporting and publishing statistics, information and financial data,” read a Farsi statement published on the Iranian government’s website on Wednesday.

The currency had lost close to half of its value on the free market since September before authorities implemented a plan to unify official and free-market exchange rates for the rial in favour of a single rate set at 42,000 against the US dollar last week.  Moreover, the Central Bank of Iran clamped a 10,000-euro ($12,400) ceiling on the amount of foreign currency that citizens can hold outside banks.

Khamenei on Wednesday 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.

 U.S. President Donald Trump has threatened to exit a 2015 nuclear deal Iran made with world powers unless it is revised. U.S. sanctions will resume unless Trump issues new “waivers” to suspend them on May 12.

Bank transactions involving the dollar are already difficult for Iran because legal risks make U.S. banks unwilling to do business with Tehran. Foreign firms can be exposed to sanctions if they do Iranian deals in dollars, even if the operations involve non-U.S. branches.