Bloomberg reported today that Iran has asked India to pay for its oil partly in yen as the two countries seek a solution on how to maintain their commercial relations amid the upcoming sanctions against the Central Bank of Iran (CBI). The CBI handles all oil transactions for Iran [Bloomberg, 22 January].
During a visit to Tehran by a high-level Indian delegation, India reportedly proposed to pay for Iran oil in rupees. Under that proposal, the Central Bank of Iran (CBI) would open rupee accounts in Indian banks and would use the oil revenues to purchase “non-strategic” goods and services from India. The Bloomberg report indicates that such arrangement, basically a variation of barter trade, was not entirely acceptable for the Iranian side.
India’s purchase of Iran crude approximates $10 billion annually. Iran’s imports from India are worth about $2.5 billion a year.
"the Central Bank of Iran (CBI) would open rupee accounts in Indian banks and would use the oil revenues to purchase “non-strategic” goods and services from India. The Bloomberg report indicates that such arrangement, basically a variation of barter trade, was not entirely acceptable for the Iranian side"
ReplyDeleteSir, please do not spread dis-education. Barter trade means goods for goods. Non-barter trade means goods for currency, that will be used to buy other goods. This is not barter in any way. It is the exact opposite.
Please help me with the definition of this arrangement: Iran exports oil to India, it will not get paid in hard currency, as almost all oil contracts are paid for. Instead Iran has to open a rupee account in an Indian bank and can only draw rupees to purchase “non-strategic” goods in India, and will not be able to transfer cash out of the country. I accept your objection that this arrangement is not technically a variation of barter trade. Please un-dis-educate us, and tell us what this arrangement is? (And please note that Iran imports $2.5 billion of Indian goods v. oil exports at close to $10 billion). These are indeed difficult days for the country.
ReplyDeleteCareful, Iran, trying to get something else than Dollari for oil is what sealed Saddams fate.
ReplyDeleteThe Indian rupee is as worthless as the rial.Iran is giving it's oil away for $5.00 a barrel which translates into a total loss.Workers must stop pumping oil so that China India Turkey won't be able to make a profit from our loss.
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