Is de-dollarization a solution to Irans economic woes?

Over the past years, exploiting the dollar as a political tool has forced various countries including Iran to explore avenues to evade the ramifications of dollar sanctions in trade ties.

Several states, e.g. the states of the Persian Gulf Cooperation Council (due to Washington sanctions on Russia),
with the sunset of US dollar dominance, have adopted alternative currencies in international transactions in a bid to minimize or eliminate the influence of the greenback.

Earlier, the Islamic Republic had announced its decision to move away from the US dollar and had acted on the decision in cooperation with other independent countries

In this regard, Iranian President Ebrahim Raisi stressed the need to de-dollarize in his comments at the 23rd virtual summit of the Shanghai Cooperation Organization (SCO).

During his address at the SCO summit, Raisi underscored the significance of establishing a fairer world order in which the US dollar is no longer the only dominant currency.

“The Western hegemonic powers, by resorting to economic coercion and sanctions, have jeopardized the security and economic prosperity and the principles of fair trade in the world,” the Iranian president added.

He went on to say that any attempt to shape a fair international system requires the removal of this instrument of dominance in intra-regional relations.

Moreover, the Leader of the Islamic Revolution referred to the weakening of the US dollar during the meeting on the 13th day of the holy month of Ramadan (April 4) in Tehran, noting “some countries that have separated themselves from the dollar…have also improved their situation.”

In a meantime, the Central Bank of Iran (CBI) is seriously pursuing the policy of de-dollarization and intends to use alternative options to expedite the global trend, CBI Governor Mohammadreza Farzin said.

Seemingly, the path which was initiated to reduce the influence of the dollar in regional and international transactions, which many countries are joining, will minimize Western dominance over the world economy.

Some economic experts, however, believe that de-dollarization policies would tackle serious challenges that make it hard to bear a fruit.

Reporter : Fatemeh Khoshroo

Is de-dollarization a solution to Iran's economic woes?