Page 16 - IRANRptJul18

5.0 External Sector & Trade
5.1 Balance of payments and current account
Euros confirmed as sole currency in Iran-EU transactions
The euro has been announced as the preferential currency for trade between Iran and the European Union following discussions between Iranian and European energy officials, Tasnim News Agency reported on May 19. Iran has been pushing to remove the US dollar from all its international trade after the Iranian rial (IRR) sank to its lowest ever rate of IRR70,000 to the dollar on the free market as the Trump administration remained hostile to Tehran in the build-up to the May 8 move by the US to unilaterally exit the multilateral Iran nuclear deal.
Speaking to reporters after his meeting with EU Energy Commissioner Miguel Arias Canete in Tehran on Saturday, head of the Iranian Atomic Energy Organization Ali Akbar Salehi said that during the session the commissioner fully explained the measures the EU plans to take following the US withdrawal from the 2015 nuclear agreement, otherwise known as the Joint Comprehensive Plan of Action (JCPOA), including t he revival of “the blocking statute” to shield companies from US sanctions.
Salehi added that the EU delegation headed by Arias Canete has also promised that the euro would be used in financial transactions between Iran and the EU.
The blocking statute move means an inevitable clash with the Trump administration, which has warned foreign companies that choose to remain involved with the Islamic Republic that they will be exposed to Washington’s reintroduction of heavy sanctions against Tehran.
The EU has started to adopt a more aggressive tone towards Donald Trump when it comes to the nuclear accord—which the UK, France and Germany and other signatories Russia, China and Iran are attempting to salvage—and trade battles initiated by the White House.
Iranian officials said they hoped the reporting currency move would encourage enterprises to switch to the euro in place of the dollar in foreign trading.
The government halted the rial's devaluation by essentially banning free market trading in the IRR by uniting the unofficial and official hard currency rates of the rial and making it unlawful to trade at any other rate.
According to new regulations seen as rushed together as officials raced to combat what they claimed was a US plot to undermine the currency , all international foreign currency transactions must be placed inside a government portal called NIMA, where companies blind bid on buying foreign currency reserves for import and export purposes. In response, several international firms in Iran have announced a halt to imports given the overall confusion.
16 IRAN Country Report July 2018 www.intellinews.com