|Iran central bank governor Valiollah Seif|
Iran governor Valiollah Seif’s central bank announced the decision in a television interview on January 29. The change will take effect on March 21, and it will impact all official financial and foreign exchange reports.
“Iran’s difficulties [in dealing] with the dollar,” Seif said, “were in place from the time of the primary sanctions and this trend is continuing,” but when it comes to other currencies, he added, “we face no limitations.”
According to Seif, who also heads the Money and Credit Council, the central bank has embarked on the process because Iran conducts the lion's share of its trade deals with the EU, China and the UAE. This leaves the country with the two options of "selecting a basket of currencies or choosing the currency that plays the biggest part in foreign trade".
Seif said that the US dollar makes up a meager portion of the country's foreign trade.
Seif gave strong hints that the country may opt for euro in releasing its key economic reports.
Although trade with US is small (Its most important trading partner is the UAE, which accounts for around 24% of all Iranian imports and exports. China is not far behind with 22%, followed by Turkey, India and the EU, all of which account for around 6% of Iran’s trade.) oil is generally priced in US dollars. The Trump administration is not likely to be happy with the Iranian move away from the oil-dollar tradition.