In financial and economic semantics, we have two kinds of foreign currencies: operational currency and reporting currency.
Operational currency refers to currency which is used in transactions but calculations and economic reports are based on the reporting currency.
In the world, economic reporting is based on the currency which is common in the country and used for foreign trades. This procedure leads to aligning the real operation in economy with reports. In Iran, most of the trades and transactions are done in other currencies rather than Dollar due to sanctions on Dollar based transactions however reporting is still Dollar Based. For instance, a significant portion of our oil’s export is to European and East Asian countries with currencies except Dollar however, all of our exports are reported in Dollar. This issue can cause different problems such as matching the operations with reports, demand’s focus on Dollar and etc.
“Iran’s difficulties [in dealing] with the Dollar were in place from the time of the primary sanctions and this trend is continuing, but we face no limitations regarding other currencies,” Valiollah Seif said in a televised interview as reported by CBI’s official news website.
He also said that the alternative currency should be stable and should have an important role in our country’s foreign trades.
According to Seif, considering that biggest portion of our trades are with EU, China and United Arab Emirates, there are two options ahead in order to change the basis foreign currency. First is using a basket of currencies and second is choosing the one that has the biggest portion in country’s trades.
“Nowadays, branches of Iranian banks are active in many countries such as Germany, France and Italy after JCPOA”, Seif added.
It is said that the alternative currency will change within the next one or two months and in line with it, CBI aimed to sign more currency swaps. In this regard, CBI has signed several agreements with different countries such as Azerbaijan, Iraq, Russia and Turkey. These agreements face difficulties in practice due to non-existence of suitable import in return of our oil export.
Another effect by using Dollar is that people usually buy Dollar in order to spend in their vacation regardless to which country is that and what the currency of that country is. Meanwhile, when they want to spend money in that specific country if the local currency is different, they should exchange their money and this will cause to an extra commission. Therefore, it seems that these consumption behaviors should be changed.
Finally, there is no doubt that considering the current situation, the best alternative for Dollar is Euro and changing the basis of calculations and economic reporting may have positive effects based on above reasons. Moreover, this action besides political effects and increase in trade with EU after JCPOA, makes economic practitioners and players more eager to use this currency and trade with Iran. It is also worth to consider that Euro like other currencies can have fluctuations caused by different news and decision made by officials in Europe but regarding current conditions, Euro can be the best alternative.