[Jeffrey D. Sachs] Will economic illiteracy trigger trade war?

Iran, South Korea to begin trade in euros

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Published : 2016-08-26 21:45
Updated : 2016-08-26 21:46

TEHRAN (AFP) -- Iran and South Korea are to start trading in euros, legally circumventing US sanctions on dollar transactions with Tehran, a senior official announced Friday.

After months of talks with Washington, at the urging of Iran, Seoul will "with US approval... convert South Korean won to euros without any direct intervention of dollars", Deputy Foreign Minister Hamid Baedinejad said on his Instagram page.

If other countries with "local and limited currencies" also traded in euros, it would "lead to easier commerce between Iranian traders and businesses and those countries", he added.

A landmark deal between Tehran and world powers, signed in July last year and which came into force in January, saw many international sanctions on Iran lifted in exchange for curbs to its nuclear programme.

But non-nuclear-related sanctions have remained in place, preventing Iranian banks and businesses from carrying out global financial transactions in dollars.

Trade between Iran and South Korea in euros will begin on August 29, Baedinejad quoted South Korean Finance Minister Yoo Il-Ho as saying.

KEB Hana Bank, Shinhan Bank and Woori Bank, which in May became the first South Korean lender to open an office in Iran, will support the transactions, he added.

Tehran and Seoul, which buys Iranian oil, agreed to triple their annual trade volume to $18 billion in May when South Korean President Park Geun-Hye visited Iran.