Iran to ditch the US dollar in retaliation to Trump's travel bans
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.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
