The Indian government plans to settle some pending oil payments to Iran through the UAE central bank, under an interim nuclear deal that has allowed Tehran access to $4.2bn in blocked funds globally, Reuters has reported, citing three sources with knowledge of the matter. Under the proposed new arrangement, the Reserve Bank of India would buy the dollars from authorised currency dealers, instead of the Indian oil buyers tapping the currency market, the sources said. The UAE central bank would then remit the funds to Iran in dirhams, the sources said. “It is indeed a complex mechanism but it has been devised to bring in transparency in the money transfer to Iran,” said one of the sources.
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