LONDON (Dow Jones)–Iran may be offering a fresh sign that reserve managers could turn cold on the troubled euro after a local news agency reported, without naming sources, that the country’s central bank plans to convert EUR45 billion from its reserves into dollars and gold.
The euro dipped on the news Wednesday, reflecting fears that a broad-based move out of the currency by such conservative and heavy-hitting investors could prove to be a significant drag. The fall was very slight, however, indicating that traders are awaiting further solid signs that this shift is underway.
The report, from the website of state news agency PressTV, said that the move is to be carried out in three phases, the first of which has already begun. Last month, the country’s central bank chief said the euro’s decline could prompt a rethink on its foreign-currency reserves.
Other countries in the region are taking similar steps, the report said, again without naming sources.
“If Iran is prepared to buy dollars, that’s pretty telling,” said Simon Derrick, a senior currencies analyst at the Bank of New York Mellon in London. “I think it’s significant. Iran spends a lot of time talking about pricing oil in euros, and now it appears to be deciding to find alternative stores of value.”
Iran is a relatively small holder of foreign-currency reserves, and details of this policy shift are so far lacking, but if such a move were mirrored elsewhere in the Middle East a…