Iranian President Mahmoud Ahmadinejad says the issue of the 'missing' $1 billion from the country's currency reserve fund is in fact an "accounting error."

In an interview on Friday, President Ahmadinejad blamed the issue on a mix-up of currencies. "In reality, they had added rials to dollars, and I declared on TV that this was an error."

Pointing to what he called the "fuss" over the "accounting error," Ahmadinejad said a committee was established to probe the issue.

"After numerous sessions, it became clear that it was an accounting error," he said, Mehr news agency reported.

Last week, Ahmadinejad's Vice President for Legal and Majlis Affairs, Mohammad-Reza Rahimi, said that the discrepancy was due to an "accounting error" by the Supreme Audit Court, the state body tasked with controlling "financial operations and activities of all ministries, institutions, government companies and other organizations which in any manner whatsoever benefit from the state budget."

However, the claim prompted a firm response from the body which rejected any talks of "accounting errors" and rebuked the government for providing "insufficient answers" in the case of the missing $1.058 billion oil money.

The court defended both methodology and accuracy of its work and revealed that there had been 1463 cases of infractions regarding the country's 2007-2008 budget.

In his latest interview, Ahmadinejad refused to reveal the balance of Iran's currency reserves, but claimed that it was "greater than it was when it was established."

He said that he had asked the Leader of the Islamic Revolution, Ayatollah Seyyed Ali Khamenei, to permit the use of some of the reserves for the oil industry.

According to the president, the move was aimed to counter the effects of Western sanctions.

Ahmadinejad said that the move was satisfactory, saying it had resulted in the "rush by (foreign) companies, and today we have signed $70 billion worth of contracts and $66 billion of work has been completed."

"This was a very good innovation and, of course, this (payment) was as a loan to the Oil Ministry, which they will pay back," he elaborated.

The issue of the 'missing' oil money, meanwhile, has become one of the contentious points in the presidential election debates. Iran's tenth presidential election is scheduled for June 12.

ZAP/MD