Euro replacing dollar in Iran's banking transactions

TEHRAN, Feb. 11 (MNA) – Trump’s arrival has shed doubts on international ties of Iranian banks who are now after replacing dollar with euro or local currencies in financial transactions in bid to counter banking sanctions. Anti-Iran banking sanction have not been fully eliminated and the path of money transfers, though a bit smoother than the past, still remains bumpy. Many banks across the globe, due to a variety of reasons including their dealings with the US and even certain imperfections in the Iranian banking system, have not fully entered into interactions with Iran yet; a fact which indicates persistence of certain barriers in this regard. Indeed, Iran’s banking system is faced with several difficulties in opening Letters of Credit (LCs) or conducting monetary transactions in high quantities. These limitations, as put by economic activists, make business harder and entrepreneurs are forced to pay much higher transfer costs. In the meantime, although US Treasury Department announced in October, 2016 that world banks were allowed to conduct monetary transactions or carry out LC opening with Iranian banks, it needs to be highlighted that the permitted exchanges can only be done in currencies other than dollar or by non-American banks. Of course, many banks in the world, in view of their financial transactions with US banks or the fact that their stockholders are American people or organization, are still doubtful as regards transfers in immense numbers. Especially since Donald Trump took office as the new American president and because of his unilateral trade policies, apprehension to work with Iranian banks seems to have increased. In other words, although overall conditions are much more satisfactory than before, certain transactions are carried out with difficulties or through exchange departments rather than banks. In line with irrational policies of the US applied against Iran’s banking system and also its own international trade, Iran takes up stronger counteractive measures to deal with these threats and sanctions. Similar to the time of sanction years and despite heavier financial constraints, Iran has opted for various ways to bypass sanctions which resulted in exports of billions of dollars of oil and non-oil exports. Presently, Iranian banks have activated defensive measures against banking sanctions as they are gradually adopting the strategy of replacing euro and local currencies in monetary transactions and also for opening LCs. Now, Iran's banking authorities are reporting on gradual removal of dollar from monetary transfers and explicitly state that American dollar will be less used in opening of LCs or banking relations. Apparently, ruling of dollar in financial transactions is approaching its end and it appears that euro remains as a reliable solution to the issue given that the European Union is after increased trade exchanges with Iran. Relatedly, a banking director has stated that in currency dealings, measures have been taken to carry out financial transactions in currencies other than US dollar and currently, along with euro, local currencies have also replaced the American money. “It seems that anti-sanction measures of Iran against threats made by Donald Trump are being unveiled and activated in a succession,” he underlined.