Posted on 07/16/2007 2:52:16 AM PDT by Blue_Ridge_Mtn_Geek
Iran asked Japanese refiners to switch to the yen to pay for all crude oil purchases, after Iran's central bank said it is reducing holdings of the U.S. dollar.
Iran wants yen-based transactions ``for any/all of your forthcoming Iranian crude oil liftings,'' according to a letter sent to Japanese refiners that was signed by Ali A. Arshi, general manager of crude oil marketing and exports in Tehran at the National Iranian Oil Co. The request is for all shipments ``effective immediately,'' according to the letter, dated July 10 and obtained by Bloomberg News.
The yen rose on speculation for an increase in demand for the currency, the result of Japan's annual 1.24 trillion yen ($10.1 billion) of oil imports from Iran. Central bankers in Venezuela, Indonesia and the United Arab Emirates have said they will invest less of their reserves in dollar assets because of the weakening currency.
(Excerpt) Read more at iranfocus.com ...
Apparently the DU folks can post any old Bloomberg stuff they want, but FR is "off limits". Says a lot about Bloomberg, doesn't it?
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x1332319
And FR says "No DU stuff wanted here". Hookay. Fortunately, these were not the only sources for this item.
I say "might", because it isn't clear to me from a paragraph near the end of the story whether or not pricing will be done in yen, just that payment will be made in yen. In particular, the article mentions an exchange rate at Tokyo Mitsubishi bank, but that most likely is a dollar-yen rate which then suggests to me that the pricing is still being done in dollars. If so, then it doesn't really matter to the Japanese importer if he delivers yen or dollars.
Of course, since the Iran government are the same folks who cannot even seem to get a simple oil bourse running, who knows what weird, uneconomic goals they actually are trying to accomplish?
Yes, they are just paying in yen, the pricing is done in dollars. Economically, this is meaningless. Perhaps Iran is saving a couple thousand bucks a year on their currency transaction costs by doing this. Really, they are gearing up to start pricing in other currencies, but I don’t even think that is a very big deal. To the exten that the demand for dollars decreases, the money supply can be reduced 1 for 1 and offset the inflationary tendecy created by a reduction in the demand for dollars.
LOLOLOL now that funny Monk so where Godzilla is spendting his Summer vacation in Tehran Iran LOL!
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