A top Iranian government official has urged businesses in Iran to open letters of credit (L/Cs) in euros in the future.

The advice coincides with the government's announcement that Iran will shift its foreign currency reserves from dollars to euros and use the euro in oil deals in response to US-led pressure on its banking sector and economy.

Dollars to euros

As expected, Tehran has now said officially it would use the euro for all future commercial transactions overseas, according to senior government spokesman Gholam-Hussein Elham.

The move comes as Iranian businessmen are complaining about delays in securing L/Cs, according a BBC report.

Under pressure

Washington, which accuses Tehran of supporting terrorism and trying to obtain nuclear weapons, is seeking to limit the flow of US dollars into Iran. It wants the UN Security Council to impose sanctions on Iran and has pressured banks worldwide to stop dealing with the Islamic republic.

Iran's state-operated Bank Saderat has already been specifically sanctioned by Washington and has responded to this by writing L/C business in other currencies (DC World News, 7 December 2006).

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