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Iran to 'confront' EU oil sanctions

The governor of Iran's central bank has said his country will not remain "passive" before a new EU embargo on the country's oil sector, adding that Tehran has enough hard currency reserves to meet its import needs.

The report by the semi-official Mehr news agency quotes Mahmoud Bahmani as saying Iran will "confront" hostile policies.

The remark is the first reaction by a senior Tehran official on the day that an EU embargo on Iranian oil goes into effect.

The EU measures are intended to pressure Iran over fears that it is developing nuclear weapons. Iran denies the claims.

Iran is the second-largest producer in Opec and earns some 80% of its foreign revenue from exporting crude. Other US and EU sanctions have already hit Iran's economy hard.

Iran's vice president Mohammad Reza Rahimi said the country has stockpiled to protect the population's daily needs, reducing the impact of the embargo on the oil and banking sectors.

He told state television's website: "Today, we are facing the heaviest of sanctions and we ask people to help officials in this battle."

He said the "dastardly sanctions" might cause "occasional confusion" in the market, but that the Iranian nation would not be stopped.

The EU said earlier this week that all contracts for importing Iranian oil will have to be terminated from Sunday. Also, European companies will no longer be involved in insuring Iranian oil.

The measures come on top of previous sanctions levied by the US and the West that have already hit Iran's economy.

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