Iran Bans Use Of US Dollars In Trade
03/01/2018 (Thu) 19:44:19
Iran Bans Use Of US Dollars In TradeRELATED PETRODOLLAR DEMISE: >>>/b/15354
In what may be a preemptive move against further US sanctions, Tehran announced that going forward, merchant purchase orders that are denominated in US Dollars would no longer be allowed to go through import procedures.
According to the state-owned IRNA news agency, the policy is in line with an official request by the Central Bank of Iran and is meant to address fluctuations in market rates of the US dollar. Quoted by IRNA, the central bank director of Foreign Exchange Rules and Policies Affairs, Mehdi Kasraeipour, said the move had "become effective from Wednesday by virtue of a letter sent to the Ministry of Industry, Mines and Trade."
The central banker further explained that the decision "wouldn’t create major trouble" for traders because the share of the greenback in Iran’s trade activities is already negligible.
"It’s been for a long time that Iran’s banking sector cannot use the dollar as a result of the sanctions," said Kasraeipour. As part of a trade embargo, US banks are banned from dealing with Iran.
"Considering that the use of the dollar is banned for Iran and traders are literally using alternative currencies in their transactions, there is no longer any reason to proceed with invoices that use the dollar as the base rate," Kasraeipour added.
As part of the transition, Iranian merchants will need to inform their suppliers to change the base currency from the dollar to other currencies so that the related import documents could be processed at Iran’s entry points. It was unclear if cryptocurrencies are acceptable units, and whether Iran is developing its own version of the Venezuelan Petro.
Merchants will also need to specify whether they would proceed with their payments through banks or currency exchange shops.
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