Iran has replaced the US dollar with the euro in calculating the value of its Oil Stabilisation Fund (OSF), reports have said.

The decision was made earlier this month by President Mahmoud Ahmadinejad, based on a recommendation by the board of directors of the fund, the Poul business daily reported.

State radio said the move was taken because the government wished to protect itself from the fragility of the US economy and the weak dollar.

The OSF, which forms part of Iran's foreign exchange reserves, is a contingency fund set aside by the government to cushion the economy against fluctuating international oil prices and help both the public and private sectors with their hard currency needs by extending loans.

The sizes of the OSF and the overall foreign exchange reserves are not regularly revealed to the public.

Ahmadinejad said last December that the OSF was worth the equivalent of over $23 billion, and state television reported at the time that the reserves exceeded $80bn.

The decision on calculating the OSF is the latest in a series of efforts by Iran, which is diplomatically hostile to the US, to reduce the role of the dollar in its economy.