Iran´s decision to switch currency accounts is now official, following a decree signed by President Ahmadinejad. Needless to say how important for oil sales. With four million barrels a day, Iran is the world’s fourth largest “black gold” producer. But it does not end there. The political side of this decision has its consequences too. But one at a time.
Asia news stated – 'Iran, the fourth largest oil producer in the world, announced its intention of replacing the US dollar with the euro in the country’s foreign exchange accounts. Iranian President Mahmud Ahmadinejad signed the decree a few days ago. The order was issued following a decision by the trustees of the country's foreign reserves, Iranian media reported. The decision will be particularly significant in the oil field."
Taking a closer look at the figures, we see that Iran's daily 4Million barrel production represent 80% of its foreign exchanges and 50% of the government budget. And take into account the country is under economic sanctions for 30 years now.
As other gulf nations have not made the switch of currency, they stay put and observe the events; for the moment not big of a threat for the American "greenies". In fact, Iran just wants to be less dependent and thus effected by the economic sanctions issued by the U.S on the long run. As for now, Iranian Central Bank estimated to cut its interest rates for the foreign exchange reserve from 12% to 5% making it cheaper for the Bank to acquire foreign currency.
Politics
On the political side of the issue, we have Iran's alignment with European Union, supposedly easier to negotiate, both on oil and its nuclear question. Far easier to delay negotiations with a group of nations than doing it with one major power.
While Iran argues its program is strictly for the peaceful purpose of power production, the U.S. and many other western countries suspect Iran of nuclear weapons production.
Sounds familiar.
What´s next ?
If we look at current events, we might have a glimpse of whether or not we are in for rough times:
- Iran switches its currency.
- This week Al Quaeda sent threats to Germany, which will hold elections this coming Sunday. If not voting against the situation government, strikes such as those of recent years which terrified Madrid and London, might take place.
-It is known that Iran has a story of love and hate with Al Quaeda since the 9/11 episode.
-This week's UN events are of major role if we look at the big picture. Ahmadinejad speech is of great importance after September 12th announcement of euro 'friendliness'.
- The once controversially elected Iran's president, has now changed the scenario.
- Global community demands for missile installation blueprints
These facts, isolated or not, are very probable to lead to nothing threatening.
The Dark Side
However, looking back through the years, what history tells us is something else:
- Not long ago Saddam announced the same currency switch. He was also suspected of holding weapons for non-pacific purposes. Saddam, as well, had some media time to expose his opinions.
We all know what happened next. In fact it STILL goes on.
The only difference now is that there will not be necessary half a year of preparation and logistics.
It will be just a matter of crossing the border.
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UpDate on the 25th - Iran does have Nuke Plant
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