India’s central bank allowed companies from the South Asian nation to trade with Iran in currencies other than the dollar and euro, a move that may help the Middle Eastern country hit by United Nations sanctions.

Companies will be allowed to settle current account and trade transactions with Iran outside the Asian Clearing Union or ACU, a regional payment settlements arrangement, the Indian central bank said in a notification on Monday.
Participants in the ACU settle transactions in either dollar or euro, according to the ACU’s website.
The change will make it flexible “to an extent” for Indian importers and exporters to step out of the ACU’s settlement mechanism and deal in more currencies, said Rahul Tripathi, assistant professor in international political economy at Goa University in the Indian state of Goa. Iran is facing United Nations sanctions and measures from the U.S. and the European Union aimed at curbing the country’s nuclear program.
“It may certainly help Iran as it gives the country greater flexibility to conduct its operations outside the ambit of ACU,” Tripathi, who did his doctoral thesis on the union, said in an interview Tuesday.
ACU, based in the Iranian capital Tehran, settles trade transactions among Bangladesh, Bhutan, India, Iran, Nepal, Pakistan, Maldives, Myanmar and Sri Lanka.
(Source: Bloomberg)