Iran and South Korea to Begin Euro Transactions Next Week

The South Korean Minister of Economy announced that his country will start transactions with Iran in euros in four days. The euro is the common currency of 19 of the 28 member countries of the European Union. According to Reuters, Yoo Il-ho, the South Korean Minister of Economy, stated that euro transactions with Iran will commence on Monday, September 8. Although international sanctions against Iran have been reduced following the implementation of the nuclear agreement with world powers, Iran remains deprived of access to the U.S. financial system and cannot transact in dollars. The South Korean Minister of Economy mentioned that trading with Iran in euros will significantly resolve the obstacles facing both countries to facilitate investments and trade transactions. Yoo Il-ho named the banks 'KEB Hana', 'Shinhan', and 'Woori' as the operational banks for conducting euro transfers between Iran and South Korea. The report adds that Seoul has so far conducted payments for oil imported from Iran and payments for construction projects in the country using its own currency, the won. Iran recently announced that it has agreed with all its oil buyers that the price of oil imported from the country will be paid in euros. Iran has increased its oil exports to over two million barrels per day, doubling its output compared to the sanctions era. Iran also exports over 400,000 barrels per day of gas condensates, with South Korea being its main customer. The South Korean news agency Yonhap also noted the Minister's remarks, stating that according to customs statistics, bilateral trade between South Korea and Iran decreased to $6.1 billion in 2015, down from about $17 billion in 2011. Iranian customs statistics indicate that in the first quarter of this year, Iran's exports to Seoul increased 25-fold. The first four-month statistics have not yet been published in detail, but South Korea is among the top five countries importing and exporting goods to Iran. According to customs reports, Iran had about $1.74 billion in non-oil exports to South Korea and about $1.26 billion in imports from South Korea in the first four months of this year. South Korea is the fifth-largest destination for Iranian goods and the fourth-largest exporter to Iran.