Iran May Exchange 45 Billion Euro in Gold and Dollars

3 June 2010 (IBT) – The Iranian central bank is said to hold a majority of 85 percent of their currency reserves in euro and some other currencies, and only a small part in U.S. dollar, different to most other central banks. This is mostly for

political reasons, as Iranian president Mahmoud Ahmadinejad famously labeled the U.S. dollar in 2007 as “worthless pieces of paper” and planned to sell oil for a basket of currencies instead of pricing it in petrodollars.

But the policy apparently changed now. The Iranian newspaper Jam-e Jam reported on Wednesday that a large amount of euros is being exchanged back into dollars because of the emerging debt crisis in the Euro-zone. The paper cites officials of the central bank, expecting a worsening of the debt problems resulting in further downside pressure on the euro.

According to the paper, the central bank plans to sell about 45 billion euro in several portions over the next coming months. The operation already began and should be concluded by September. Besides dollars, the Iranian central bank also wants to buy gold, but didn’t give a press release about the matter.

By: By Mark Hoffman
Source: IBT