Euro to become the official foreign currency used in Iran

Euro to become the official foreign currency used in Iran
ID : N-1583 Date : 2018/04/10 - 16:19

(Persia Digest) – Currency fluctuations over the past months in Iran, especially in recent days, has prompted the government to make new policies in order to control the forex market here. It has taken immediate action by setting a single price of tomans 4200 for the US dollar; but, reports indicate exchange offices are refusing to sell the dollar at this price and all exchanges have come to a halt.

The Iranian government’s long-term plans to resolve the issue of occasional fluctuations is to change the official foreign currency used in Iran from the dollar to euro. The CEO of the Central Bank of Iran (CBI) went to Parliament today to explain the situation. This is what he had to say: “I discussed the replacement of the dollar with the euro with the Supreme Leader who welcomed the proposal.” This was confirmed by the spokesman for the Iranian government, Mohammad-Bagher Nobakht, a few hours later, saying: “We have plans to change the currency used for imports from the dollar to the euro.”

Nobakht pointed out that Iran was in the midst of an economic war and its enemies were trying to crash its economy. He said: “The issue of converting the currency system from the dollar to euro was raised some time ago, but the CBI had not made this public until now.”

The Iranian government has previously discussed this in talks with certain countries, such as China, Russia, and Turkey, to eliminate the dollar and use national currencies in trade.

Economists say Iran will mostly benefit from eliminating the dollar in case of increased sanctions against the country. Nevertheless, diminishing the importance of the dollar will effectively increase the use of replacement currencies and fluctuations in the forex market will move from the dollar to other currencies.

Experts believe that recent increases governing the market in Iran were not due to the real price of the dollar, but rather the IRR losing its value, since the rates for the pound sterling and euro also increased simultaneously with the dollar exchange rates. Ignoring this point can lead to computational errors in determining the monetary and financial policies of Iran.

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