"The surplus trade between India and Iran, of which oil
is an important part, was in euros and dollars. In order to prevent Americans
and Europeans creating trouble for (oil sales), we switched to other currencies
like the Japanese yen, the Emirati dirham, or other monetary units,"
Iran's Fars news agency quoted Ahmad Khaledi, Iran's deputy oil minister, as
saying.
On Dec. 23, the Reserve Bank of India said that companies
would be allowed to settle current account and trade transactions with Iran
outside the Asian Clearing Union (ACU).
The ACU, based in Tehran, is an arrangement where the
participants settle payments for intra-regional transactions among member
central banks, helping economize the use of foreign exchange and transfer
costs. The bloc includes the central banks of India, Bangladesh, the Maldives,
Myanmar, Iran, Pakistan, Bhutan, Nepal and Sri Lanka.
Participants in the ACU settle transactions in either the US
dollar or euro. Iran had refused to sell oil under the new rules.
Indian officials were tightlipped, but an Indian industry
source said: "The issue has not been resolved at today's meeting. Views of
all stakeholders will be taken into account, we are hopeful that it will be
resolved shortly."
Earlier in the day, the Indian government dismissed reports
that it was acting under pressure, adding that there was a
"technical" problem in settling the current account transactions with
Iran under the ACU.
"Efforts are being made to resolve the issue as soon as
possible," India's External Affairs Ministry said. "We have seen
reports regarding problems with respect to settlement of current account
transactions with Iran under the Asian Clearing Union mechanism."
"This is a technical issue and the Reserve Bank of
India is seized of the matter. Efforts are being made to resolve the issue as
soon as possible. There is no question of India acting under pressure of any
country," the ministry said, without naming the United States, which wants
governments to stop dealing with Iran because of its nuclear program.
The White House on Thursday praised the RBI's decision, a
move that came less than two months after the US President Barack Obama's trip
to India, where he pledged to help boost New Delhi's global role.
India and Iran could agree to settle deals in Iran's rial or
another currency such as the Japanese yen, Indian Oil Secretary S. Sundareshan
suggested Thursday. Payments through a third-country central or commercial bank
was also on the card.
India is the world's fourth-largest importer of crude and
Iran is its second largest supplier after Saudi Arabia. India buys about
400,000 barrels per day of Iranian crude, sending roughly $12 billion a year to
Tehran via the Asian Clearing Union, a system created in the 1970s.
Currently, Iran has four big oil buyers — China, Japan,
South Korea and India. Of these, China and Japan follow the European bank
channel route. South Korea deals a currency-to-currency route, which is not
financially viable for India because of its trade imbalance with Iran.
UN sanction on Iran do not forbid buying oil from the
country. Recently, the European Central Bank asked the RBI and other central banks
of ACU to provide certificates that the euro being used to import products are
not on US sanctions list.
