News ID: 213869
Published: 0146 GMT April 24, 2018

Iranian economist: Dumping dollar 'logical', 'admissible'

Iranian economist: Dumping dollar 'logical', 'admissible'

An Iranian economist has hailed plans by the government of President Hassan Rouhani to replace the dollar with the euro in foreign-currency accounting as 'logical' and 'admissible'.

"In terms of political views, dumping the dollar is logical and admissible. But in terms of economic perspectives, such a move should be based on planning since the failure to devise comprehensive plans for payments and opening LCs could bring about economic losses," Mohammad Khoshchehreh, an economist and former lawmaker told Khabar Online.

Some countries have been stepping up efforts to wean themselves off the US currency to chip away at the dollar's decades-long dominance.

Iran is the latest nation to report foreign currency exchange rates in euro rather than US dollar.

Last week, the Rouhani government announced the replacement of the greenback with the European currency and decided that the euro will be used when giving the rial's exchange rate in all official statements and accounts.

The decision was made following a crisis in the foreign exchange market which saw the rial dive to a record low against the US dollar.

Each dollar was traded for an all-time high of 60,000 rials in the open market a few weeks ago, which pushed the government to adopt urgent measures to contain a looming upheaval in the forex market.

The Central Bank of Iran (CBI) has stopped free market trading of the US currency by introducing an official rate of 42,000 rials for each dollar in a bid to control the currency crisis.

Iran's new currency policy is also seen as a measure to bypass restrictions on accessing the US currency amid tensions between the US and Iran.

US President Donald Trump has exacerbated such tensions by threatening to exit the 2015 Iran nuclear deal known as the Joint Comprehensive Plan of Action (JCPOA).

The deal was signed between Tehran and the P5+1 — the US, Russia, China, France, Britain, and Germany — in July 2015.

However, Trump has frequently railed against the nuclear accord labelling it as the "worst deal ever negotiated". He has called on the three European signatories to the deal to make 'significant changes' to it to prevent the White House's withdrawal.


Countering US 'unilateralism'

Commenting on US policies, Khoshchehreh said moving away from the dollar can serve as a tool against Washington's 'unilateralism'.

'I believe that turning to the euro is among the mechanisms that can counter America's unilateralism following the collapse of the former Soviet Union. This tool is a hedge against US attempts to create a unipolar world," he said.

The former lawmaker said Iran should counter the US currency since it is countering Washington in the political stage.

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