Talks on payment for Iran oil unresolved

The ongoing dispute between India and Iran over the currency for oil payments may be resolved only in the New Year. Officials from the two countries are continuing with their discussions as they look for alternate options for oil payments. Officials from the Reserve Bank of India met with a delegation from the Central Bank of Iran on Friday to resolve the impasse. It was a technical level meeting to discuss the various modalities for facilitating future trade transactions with Iran,including oil, read the RBI statement. However,Tehrans semi-official Fars news agency quoting the deputy oil minister Ahmad Khaledi said the dispute was resolved. By changing the currency for oil transaction between Iran and India the problem was solved, Khaledi was quoted. India is likely to write to the EU for exemption from the certification process currently required for imports from Iran. The General Body of the Asian Clearing Unit (ACU) at a later date may also recognise another currency apart from Euro for settling transactions. Till October this year,transactions between the two countries were carried out in Euro through the ACU mechanism which was set up in 1974. However,after the European Union imposed wide-ranged sanctions on imports from Iran on October 25,an end-use certification by RBI was required under the ACU mechanism. Since the new set of EU sanctions in October,India owes dues amounting to one billion Euro to Iran. The disagreement arose after RBI last week said transactions between the two countries should be kept outside the ACU mechanism and conducted in a currency other than Euro. Iran had however refused to sell oil under these rules.