Iran's move is truly tough! No longer accepting US dollars or Chinese yuan, Iran is now switching to its own rial! On April 30, according to foreign media reports, Iran has announced it will no longer accept payment in US dollars or Chinese yuan for tolls. The Iranian parliament is set to pass a new bill requiring vessels passing through the Strait of Hormuz to pay tolls exclusively in Iranian rials. This move aims to reduce dependence on foreign currencies and strengthen the international standing of Iran’s domestic currency.
It must be said that Iran’s strategy is indeed bold. Why so? From Iran’s perspective, refusing both the US dollar and the Chinese yuan means that all ships passing through must find ways to obtain Iranian currency. As a result, shipping companies and energy firms wishing to operate normally through the Strait of Hormuz will have to open rial settlement accounts and hold rial foreign exchange reserves—inevitably significantly increasing the international demand and trading volume for the rial.
Just as the United States recently passed sanctions targeting Iran’s “shadow banking” system, attempting to completely block Iran’s cross-border capital flows and cut off alternative channels bypassing the dollar-based financial system, Iran counters with a precisely targeted response: mandating that all vessels passing through the Strait of Hormuz pay tolls only in rials. By forcing the use of its own currency, Iran effectively creates a rigid international demand for the rial. Clearly, in the face of U.S. financial blockade, Iran’s response is both forceful and effective.
Original source: toutiao.com/article/1863885933518874/
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