The Central Bank of Iran (CBI) is converting 45 billion euros of its foreign exchange reserves into dollars and some gold ingots [Press TV, 2 June].
CBI last year had replaced a substantial part of its dollar reserves into euros. Its latest move to migrate back to dollar comes against a background of growing euro-zone economic crisis and sharp drop in the value of euro against the dollar.
9 comments:
It is ironic that Iran has lost so much money first converting dollar to Euro and then back from Euro to dollar for the sake of making a symbolic defiance statement (in such a volatile currency market). This is what happens when idealogy overrides sound economic judements. The loser is as always the Iranian public!
The people write too much nonsense
Today
€ is falling Iran changed to $
2-3 Years ago
$ was falling, Iran changed to €
just following the market.
That is no sign of Ideologie or defiance.
I agree, this is a normal business practice in FOREX markets. Iran has healthy reserves and has to diversify as the market conditions warrant. The Zionist/Bildeberg bankers are ruining Euro economies one at time, so Iran is safeguarding its assets. All nations and individual do it. Nothing to do with idealogy, its all about economics and fiscal management.
Someone said:
Today
€ is falling Iran changed to $
yep. Iran is shorting euro. But you only short/sell when the price is high and NOT the other way round! You do not sell the base currency low. On the contrary you may think it is a good buy because 1) you will get more Euros for your dollars now and 2) you expect that Euro to go up in parity compared to dollar in future 3) you think that euro is going to lose MORE and try to cut your losses. Iran is simply selling it because they are trying to reduce their losses. In other words they have already lost money by buying Euro at the wrong time and now selling it at the wrong time!
I donot know if Iran lost money as
2-3 Years ago they hanged to $.
I donot know if It is wise today they sell euros.
Nobody knows it
I said only
"Iran follows the Market"
of course you can try to guess the Market Behaivor and Market
and become multi Billonnary.
you need only to be a prophet
Why you wast yout time here ?
You said:
I donot know if Iran lost money as
2-3 Years ago they hanged to $.
I donot know if It is wise today they sell euros.
*Nobody knows it*
Everyone with an elementary knowledge of currency market knows that if Iran has had sold Euro two months ago (when Greece's issues were deemed to be resolvable), Iran would have possibly avoided further losses.
Governments do not conduct currency exchange to be billionaires. They conduct it as part of their economic strategy and needs.
I am not wasting my time in here. On the contrary the one is you who is talking about something that he/she does not have a clue with broken English!
Are you a Prohet ?
The problem of Greece , Spain and portugal which caused Euros downfall were not predictable even to Europa Central bank or European Governments
how can an Iranian Banker anticipate it ?
According to PRESS-TV, They have developed a three phase plan to convert the currency.
That means they can not convert from today to tommorow Billions
Euros Reserve
Guys,
These are not normal FOREX transactions. You do not buy euro at its historic highs and sell it when it has lost so much of its value. The explanation might very well be non-economic: Iran sold its dollars (the denomination of its foreign reserves for decades) as an anti-US measure (mistaking dollar as enemy!) and now with the value of euro falling rapidly, it is converting euro back to dollar out of desperation to limit its growing loss. If there is a lesson in this: ideology and economics do not go well together.
Are you a Prophet ?
The answer is I am not and neither I wish to be. As Nader explained the whole of this fiasco was based upon a simple bravado. I recall President of Iran calling dollar a worthless paper. Now there is a U turn and Iran is buying that worthless dollar back at higher prices!
I believe I understand reasonably well when to long and short. FYI, EURO/USD is the largest currency pair traded, followed by USD/JPY, GBP/USD etc. Like anything else (and perhaps more important in FOREX), you do not go around advertising your intention in advance. If you are a reasonable major like CBI, you do not tell others that you are going to buy Euros! That will make sure that those holding Euros will hold longer in the hope that EURO/USD is going to go up. Likewise when you are selling you do not go around telling others that you are going to flood the Market with Euros. That will force the dollar holders to keep on to their dollars (they know you will be selling Euros cheap and buying dollars). The result would be a fall in price of Euros (the one you have in your hand) and rise in price of dollars.
Also bear in mind that oil is traded in dollars (whether the president likes it or not). When oil price goes up, dollar generally goes down and vice versa. When the economic situation deteriorate (say right now), the appetite for risk goes down and interest in US government guaranteed bonds that pay a fixed interest goes higher. Euro is in such a mess now because richer EU countries do not want to bail out losers like Greece or Portugal whose economies are largely based on agriculture and tourism or worse the Eastern European economies in the queue, who in the past had Socialism with no social justice and now trying Capitalism without Capital. So whatever the president thinks about, he simple needs to look around and dollar is still the King. BTW, Chinese hold the largest reserve of US dollars in the world. No one saw them buying Euros.
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