kayhan.ir

News ID: 24009
Publish Date : 17 February 2016 - 22:25

Brazil to Ditch Dollar for Iran Trade

BRASILIA (Dispatches) -- Brazil will accept payment from Iran in euros and other currencies for planes, cars and machinery to sidestep lingering U.S. sanctions on the oil-rich nation, Trade Minister Armando Monteiro told Reuters.
Monteiro is the first Brazilian official to confirm that Latin America's biggest economy could accept payment in currencies including the euro from Iran, which is forbidden from using the U.S. financial system under the sanctions.
Brazilian President Dilma Rousseff could visit Iran this year to bolster exports, he said.
"Everyone is racing after Iran now ... The trade potential is very big," said Monteiro. "We will find ways to settle payments, the type of payment and currency."
Following a nuclear deal that lifted sanctions last month, Iran has sought to settle debts and sell oil in euros to reduce its dependence on the U.S. dollar.
Monteiro said Brazil aims to triple trade flows with Iran to $5 billion by 2019, a rare bright spot as the country sinks into what could be its worst recession in more than a century.
Rousseff lifted sanctions against the OPEC nation last week after meeting with the Iranian ambassador, hoping to bolster trade between the two nations, which have enjoyed warm ties for years despite tensions with the West.
Although it is not clear whether any attempt to circumvent the U.S. financial system could raise tensions with Washington, Brazil's government in the past has annoyed the United States by drawing closer to Tehran.
Iranian President Hassan Rouhani signed a raft of deals with European companies in January, many of them priced in euros.
With a population of 80 million and annual output of some $400 billion, Iran is the biggest economy to rejoin the global trading system since the Soviet Union broke up over two decades ago.
The Iranian government has already contacted Brazilian planemaker Embraer for the purchase of commercial jets for regional aviation, Monteiro said.
Embraer, the world's No. 3 commercial plane maker, confirmed that Iran was interested in its aircraft. The Islamic Republic is eyeing the four models of Embraer's E1 family of regional jets, because of their low maintenance costs, said an official spokesman for the company.
"Iran is a very interesting market because there is a lot of repressed demand and it is a huge country so there is great potential for regional aviation," the spokesman said.
Monteiro said Iran is also interested in Brazilian cars and trucks as well as machinery to renew its aging network of oil refineries.
"Our focus is to expand our participation in manufacturing, which is the first item on the negotiating table," said Monteiro, who visited Tehran last year with a group of Brazilian businessmen.
On the other hand, Brazil is interested in importing natural liquefied gas from Iran, Monteiro added.
 He visited Tehran with a delegation of 60 traders and state officials through October 26-29 to discuss strengthening commercial ties.
Iranian officials say the Central Bank of Iran (CBI) has decided to carry out all foreign trade in euros since the U.S. is preventing its banks from doing business with Iran despite the lifting of sanctions.
Washington says it has eased "secondary” sanctions targeting companies outside the U.S. and Americans seeking certain businesses in Iran but most "primary” sanctions related to terrorism and rights accusations remain in place.
Under the order, all foreign banks operating in the U.S. are forbidden from clearing dollar-denominated transactions involving Iran through American banks.
The measures have only clipped the wings of U.S. companies as major companies from Asia to Europe have been rushing to resurrect trade with Iran.