Iran shifts from euro in oil sale

Tehran: Iran's central bank has begun the first phase of the 45 billion euro (Dh202 billion) sale of some of its reserves for dollars.

According to the state-run Jaam-e-Jam newspaper, the bank has begun selling 15 billion euros (Dh67.4 billion) in the first of three stages, to be completed by September 22.

Iran will "substantially" decrease its oil sales in euros.

It has also informed Japan and other crude-oil customers of the change.

Iran's euro reserves are 55 per cent of the total, and are likely to be reduced to 20 to 25 per cent after the sale is complete and oil sales in euros have been reduced, the paper said. Iran's shift out of euros has been prompted by the single currency's decline, which is owned by the state broadcaster. Other central banks in the region are also reducing their euro reserves.

Experts in Iran's central bank have suggested the country buy gold because they forecast that the precious metal's price will increase. Meanwhile the euro made up 27.4 per cent of global currency reserves at the end of 2009, according to the most recent data available from the International Monetary Fund. While that was down from 27.8 per cent in September, it was up from 26.4 per cent a year earlier.

The euro has fallen 15 per cent against the dollar this year, reaching a four-year low yesterday amid concern that the debt crisis which started in Greece, will spread to other nations and dent economic growth.

The slide forced European Union leaders to piece together an almost $1 trillion (Dh4.5 trillion) loan package last month.