Iran No Longer Accepts U.S. Dollar In Oil Trade

May 1, 2008 12:08 a.m. EST

Tehran, Iran (AHN) - Iran is no longer accepting U.S. dollars for purchases of its oil and is selling the commodity in the world market only in euro and yen.

Cbsnews.com quoted Iranian Oil Ministry official Hojjatollah Ghanimifard as saying on Wednesday, "The dollar has totally been removed from Iran's oil transactions. We have agreed with all of our crude oil customers to do our transactions in non-dollar currencies."

The official said that Iran is selling oil to Europe in euro and to Asia in yen.

Iran decided to abandon using the dollar because the depreciation of the U.S. currency is eating away the country's foreign currency reserves.

The move is also a way of skirting Washington's economic sanction against the world's second-largest oil producer for its alleged nuclear bomb program and support of insurgents in Iraq.

Iran's central bank also has cut down on U.S. dollar-denominated foreign money reserves because U.S. and European banks made it difficult for them to transact business in dollars.