Iran decreases dollar dependency

In a move that reflected politics as much as economics, Iran announced that it would immediately begin managing its budget and expenditure in Euros, rather than in USD. This change will also apply to oil revenues, despite the fact that oil contracts will continue to be settled in USD. While the announcement could certainly inspire other nations to the same, it was not enough to scare USD bulls by itself; as one analyst pointed out, 70% of Iran’s forex reserves are already held in European assets, so there is not much more potential for diversification there. The Wall Street Journal reports:

The move is the latest in a number of steps taken by Iran to reduce its dollar dependency after the US renewed banking and monetary restrictions on Iran.

Read More: Iranian Budget Shift to Euros Causes Little Damage to Dollar