Central Bank of Iran (CBI) governor Valiollah Seif has said the cabinet is planning to push ahead with proposals to replace the dollar with the euro for all transactions conducted with foreign countries, Tasnim News Agency reported on April 11.

Late on April 9, faced with a plunging rial amid concerns about Iran's economic future in the face of unrelenting hostility from Donald Trump, the government made open market trading of the rial for hard currencies unlawful and said that from now on only unified official foreign exchange rates could be used.

The rial’s exchange rate was officially set at IRR42,000 to the dollar, IRR51,929 to the euro and IRR59,449 to the pound sterling, respectively. However, it is thought many traders are resisting selling any dollars, euros or pounds at the official rates.

Seif reiterated that the issue of switching the currency used in foreign transactions from the dollar to the euro was a serious proposal and would be approved by the cabinet shortly.

He added that the administration’s unification of the unofficial and official exchange rates has “had positive effects on the country’s economy”. One benefit, he added, was that the country’s economy was less vulnerable to conspiracies devised by enemies .

The announcement by the central bank chief followed remarks from US Treasury Secretary Steve Mnuchin on April 11 in which he said the US might be set to again impose “very strong” sanctions against Tehran.

Mnuchin referred to “primary and secondary sanctions” that could be introduced, relating to penalties against Iran itself and entities that do business with the Iranians.

The Treasury chief spoke to reporters after testifying before a House appropriations subcommittee. His words will do nothing to assuage fears that Trump, having added more hawkish advisors to his administration in recent weeks including national security advisor John Bolton, is preparing to withdraw the US from the nuclear deal, also adopted by the UK, France, Germany, Russia and China, along with Iran, in October 2015.

“If the president doesn’t sign the [latest nuclear deal] certification, the sanctions snap back into place,” Mnuchin said, according to Bloomberg. “I do think the primary and secondary sanctions would have an important impact on the Iranian economy, and that’s something he’s thinking about and balancing as he makes his decision.”