QATAR, United Arab Emirates (CBS News) — Iran’s Central Bank says it has agreed to sell $10 billion in cash-based foreign exchange swaps, as part of a deal that will allow the Islamic Republic to bypass the US dollar for foreign exchange transactions.
The Central Bank of Iran, the country’s central bank, said the swap deal will help to finance the purchase of Iranian oil and natural gas.
The Iranian Central Bank said in a statement on Thursday that the deal includes the issuance of a new $5.5 billion international swap agreement for foreign currency transactions, which will be used to cover the cost of the purchase, the Central Bank statement said.
The move follows a recent announcement by Iran’s central banking board that it would allow the country to bypass US dollar-based exchange rates in its international dealings.
It said it had received confirmation from the US Treasury Department that it had agreed to approve the swap, but added that it was too early to confirm its exact terms.
The Iran Oil Finance Company, which owns the Central Oil and Gas Company of Iran (COGI), is expected to be the largest buyer of Iran’s oil, and Iran’s state-owned energy company Aramco is also expected to purchase Iranian oil.
The $10-billion swap will allow Iran to bypass international currency markets, and thus bypass US Treasury and Fed-mandated controls on US foreign exchange purchases.
The US has already imposed sanctions on Iran for its disputed nuclear program.
The deal between Iran and the Central Banks of Oman and Qatar was announced in December and signed in early January.
Iran has been trying to secure a global oil market that could eventually rival Saudi Arabia, the United Arab Kingdom and Venezuela.