India is looking at three currencies – euro, yen and dirhams – for making payments on the Iranian oil imports, a top Finance Ministry official has said.

“We have to work out some other currency through which payment has to be made. We have options on euro, yen or dirham. We can look at some of these currencies,” Mr R. Gopalan, Secretary in Department of Financial Services, told reporters here on Tuesday.

The need for India to look at these currencies has arisen because the Reserve Bank of India announced in late December that payments for Iranian oil imports could no longer be made through Asian currency-clearing union (ACU).

The RBI action is being seen by some observers as yet another effort to enhance India's friendly ties with the US, which had imposed sanctions on Iran for its nuclear programme.

Mr Gopalan, however, declined to comment on using the rupee as a mode of payment. India will now look at banks that are not prohibited from dealing with Iran.

Iran is a big supplier of oil to India and accounts for 13 per cent of oil imports. The annual value of oil imports from Iran is estimated at $12 billion.

Team to Teheran

Mr Gopalan also said that an Indian delegation comprising officials from Finance Ministry, Reserve Bank of India and State Bank of India will visit Teheran on January 14 to discuss the issue with Iranian authorities.

The Asian Monetary Unit (AMUs) is the common unit of account of ACU and is denominated as ‘ACU dollar' and ‘ACU Euro', which is equivalent in value to one US dollar and one Euro. All instruments of payment under ACU have to be denominated in AMUs.

Under the ACU, settlement is done on netting basis and payments are made on the net position at the end of a settlement period. The payment can be in US dollar or euro or in any other mutually acceptable currency.

> krsrivats@thehindu.co.in

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