Iran dumps dollar in favour of euro

President Hassan Rouhani decided that the euro will be used when giving the rial’s exchange rate

President Hassan Rouhani and his cabinet has decided that the euro will be used when giving the rial’s exchange rate in all official statements and accounts. Ebrahim Noroozi / AP

Iran’s central bank will dump the dollar and ‘manage’ its local currency using primarily the euro, a state-run news agency reported, amid a deepening confrontation with the United States.

Iran President Hassan Rouhani and his cabinet decided on Wednesday that the euro will also be used when giving the rial's exchange rate in all official statements and accounts, Iranian Students' News Agency cited a government statement as saying. It did not say when the decision would come into effect.

Tensions between the Islamic Republic and the US have spiked since the beginning of the Trump presidency, which wants to roll back Iranian influence in the Middle East with the assistance of America’s Gulf Arab allies.

President Donald Trump has set a May 12 deadline for his decision whether to pull out of the 2015 nuclear deal that allowed Iran’s economy to re-engage with world trade. European powers want to preserve the accord.

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Iranian officials want to wean the country’s businesses away from trading with the dollar, which is still subject to primary sanctions enforced by Washington.

Leaders have pointed the finger at enemies overseas in recent days as they rolled out urgent measures to contain a currency crisis that’s seen the rial plummet to a series of record lows.

On Wednesday, Iran's supreme leader Ayatollah Ali Khamenei joined in, saying the “footprints of foreign intelligence” agencies had played a role in the currency slump.