Iranian government institutions will start reporting foreign currency amounts in Euros rather than US Dollars, state media said on Wednesday as part of the country’s effort to reduce its reliance on the American currency.
The new policy will encourage government-related enterprises to use Euros. So, does it mean that Dollar has no place in Iranian transactions today?
Efforts to get rid of USD
Tehran has been trying for years to move away from the Dollar because of political tensions with Washington, although much of the country’s international trade is still conducted in dollars and ordinary Iranians use them for travel and savings.
So far, oil producing countries such as Venezuela, Saudi and Russia are making efforts to get rid of US dollars.
And we have reported the article related to this issue:
No Dollars But Only RMB in Trade Between Pakistan & China?!
US Dollars Payment Not Available In These Countries!
No USD, but EUR!
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.
As a result, France will start offering Euro-denominated credits to Iranian buyers of its goods later this year to keep its trade out of reach of U.S. sanctions. That means, widening promotion of Euros will reduce reliance on US Dollars.
Exchange rate depreciation
The foreign exchange market of Iran has been remaining unstable these few months because of sanctions made by America.
The exchange rate of Rial against US Dollar has dropped to the lowest level in its history since this year. There are 60,000 Rial per Dollar at the current level. Early in 2013, there were only 36,000 Rial per Dollar.
In order to stem panic, Tehran government regulates the fixed rate at 42,000 Rials per dollar, warning that if anyone who violates the rule will subject to penalty.
For now, 39 violators have been arrested in these days, and 80 unlicensed currency exchange shops have been shut down.
Therefore, please pay more attention if you have import and export business in Iranian regions!
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