In a number of recent reports in the media, the Iranian government will no longer use the US dollar in official statements or for financial reporting, local media has reported.
The governor of the Central Bank of Iran, Valiollah Seif, made the announcement on Friday, adding that the country would switch to another common foreign currency or a basket with a ‘high degree of stability” for all financial and foreign exchange reports. The decision will go into effect at the beginning of the new fiscal year in March.
This matters because the use of the U.S. dollar as its standard currency helps to keep demand for the U.S. dollar high. Given the amount that the US economy rely's on its creditors, should oil producing nations work out sales to say, China, in an alternative currency, it could have serious negative ramifications for the dollar and bond prices could come under pressure and inflation would be the last thing the U.S. consumer would need to worry about. Moreover, tensions are already high between the two nations and this could be prompting the U.S. government to take stern measures to combat Iran’s actions - Iran holds 13 percent of OPEC’s oil reserves.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.