Pages: 10-20

Abstract

This paper, according to the Ayatollah Khamenei's statement, removes US dollor in economic transactions. And also in order to achieve Resistive economy, since most of our economic transactions are oil transactions, this paper need to choose a vehicle currency other than the dollar and enter into our transactions. As shown in this paper, can be seen that most of Iran's oil transactions are done with China; for the reasons that will be discussed later, between the currency of Iran and China, Yuan is the best currency to choose as a vehicle currency in oil trades. This paper concluded that: the pass-through effects of the yuan’s appreciations on prices of China imports and that of Japan differ substantially. While pass-through effects on China import prices are relatively weak, about 23% in the short run and less than 47% in the long run, I did not find any evidence that the yuan’s appreciation from July 2007 to 2010 was passed into prices of Japanese import from the IRI. So yuan is the best Selection vehicle currency for Iran's oil contracts.