Settle all Indo-Iran trade deals outside ACU

The Reserve Bank of India today said all current account transactions, including trade deals with Iran should be settled in any permitted currency outside the Asian Currency Union (ACU).

Last week, RBI had directed that payment for importing oil or gas from Iran should be settled in any permitted currency outside the ACU mechanism. Importers and exporters have been experiencing difficulties in payments to /receipts from Iran. Hence, these transactions should be settled outside ACU until further notice.

Senior public sector banker said this RBI communication has acknowledged the fact (of banks’ effort to mostly settle Indo-Iran trade deals in currencies other than the dollar and euro to avoid adverse impact sanctions on Iran).