Chavez in Iran: "Empire of Dollar is crashing"

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Venezuelan President Hugo Chavez said on Monday the "empire of the dollar is crashing", a day after his country and anti-U.S. ally Iran advocated action over the weakening US currency during an OPEC summit in Riyadh.

Chavez, who on Saturday said oil prices could double to $200 per barrel if the United States attacks Iran over its disputed atomic ambitions, spoke to reporters after talks with his Iranian counterpart Mahmoud Ahmadinejad in Tehran.

The two leaders agreed to set up a joint Iranian-Venezuelan bank and also signed deals to boost cooperation in the oil, petrochemical and industry sectors, Iranian media reported without giving details about the accords.

Ahmadinejad -- whose country is under banking and other international sanctions over its nuclear programme -- on Sunday called the U.S. dollar a "worthless piece of paper" and Chavez took a similar line on Monday.

"Soon we will not talk about dollars because the dollar is falling in value and the empire of the dollar is crashing," Chavez said in comments translated into Farsi from Spanish.

"Naturally, by the crash of the dollar, America's empire will crash," Chavez said at a joint news conference with Ahmadinejad. The two presidents share the same viewpoint in denouncing U.S. influence in the world.

The final statement of the oil cartel's Nov. 17-18 summit did not include any reference to the falling dollar, in an apparent victory for U.S.-allied moderates led by Saudi Arabia.

But Iran and Venezuela made clear before and after the summit that they would press for action, which could include pricing oil in a basket of currencies.

BANKING SANCTIONS

A fall in the value of the U.S. dollar on global markets helped fuel oil's rally to a record $98.62 on Nov. 7 but it has also eroded the purchasing power of OPEC members.

Fears the United States could attack Iran -- over a nuclear energy programme Washington says is a cover for seeking bombs -- have also contributed to dearer crude. Tehran denies the charge.

Chavez last visited Iran in July when he and Ahmadinejad launched construction of a joint petrochemical plant in a bid to strengthen an "axis of unity" between their nations.

"We are determined to expand our bilateral and international cooperation as much as possible and to defend our nations' rights," Ahmadinejad said on Monday.

"Today we reached very important and constructive agreements which will accelerate the two countries' cooperation," Iran's state broadcaster quoted him as saying.

Chavez said he believed other countries would join the joint bank. The announcement comes after many Western banks, under U.S. pressure, either pulled out or reduced business with Iran, which is under U.N. sanctions over its refusal to suspend its most sensitive nuclear work.

Iranian leaders have shrugged off the impact of sanctions but economic analysts say they are hurting badly needed investment in the country, which is struggling with double-digit inflation and jobless rates. (Reuters)

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