Euro finds a friend: Iraq

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Euro finds a friend: Iraq Baghdad to switch from dollar for trade purposes, blames 'hostility' September 26, 2000: 7:15 a.m. ET

BAGHDAD (Reuters) - Iraq has decided to stop trading with the U.S. dollar and replace it with the euro or another currency because of "hostile American policy," the country's finance minister said Tuesday.

"The cabinet has decided to stop trading with the American currency, the dollar, and replace it with other currencies such as the euro," Deputy Prime Minister and Finance Minister Hikmat Mezban Ibrahim said in a statement carried by the Iraqi News Agency on Tuesday.

Ibrahim said the decision was taken at a cabinet meeting chaired by President Saddam Hussein on Monday.

Earlier this month a cabinet meeting decided to set up a committee of economists to study the possibility of using the euro or another currency instead of the dollar in the transaction of Iraq's overseas trade.

A statement after the Sept. 14 meeting said the move was to confront the "daily American-Zionist aggression."

The United States, along with Britain, is enforcing no-fly zones in northern and southern Iraq to protect a Kurdish enclave in the north and Shi'ite Muslims in the south from possible attacks by government forces.

An Iraqi newspaper said the decision would boost Iraq's volatile currency, which has plummeted in value under U.N. trade sanctions imposed after the war that followed Baghdad's 1990 invasion of Kuwait.

Al-Itihad weekly, Iraq's economic newspaper, on Tuesday said it expected the Iraqi dinar to gain against the dollar. The dollar was worth about 1,950 dinars on Tuesday, compared with 2,080 two weeks ago.

Baghdad's trade with the rest of the world is governed by an oil-for-food deal with the United Nations. The deal allows Iraq to sell unlimited quantities of oil to buy food, medicine and other goods for humanitarian needs.

http://cnnfn.cnn.com/2000/09/26/europe/wires/iraq_wg/

-- Martin Thompson (mthom1927@aol.com), September 26, 2000


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