Head of the Bank of Russia Elvira Nabiullina is due to visit Iran, ambassador of the Islamic Republic in Moscow, Kazem Jalali said on Wednesday.
"The chairman of Bank of Russia is expected to Iran soon," Jalali said in a video interview at the press center of the Parlamentskaya gazeta newspaper, TASS reported.
In January Farzin said that representatives of the two central banks signed an agreement to boost financial and banking ties.
The central banks of Iran and Russia last month signed a deal to connect their national interbank communication and transfer systems to boost trade and ease bilateral bank transactions.
Per the deal, 52 branches of Iranian banks and four unnamed foreign banks will use Iran's local interbank telecom system, known as SEPAM, to connect with 106 banks using Russia's System for Transfer of Financial Messages or SPFS, the CBI website said.
Iran's Shahr Bank and Russia's VTB Bank will be involved in the pilot program and other lenders will join gradually.
The agreement was signed in Tehran by the CBI deputy head for international affairs, Mohsen Karimi, and Vladislav Gridchin, on behalf of Russia’s central bank.
Karimi said the deal is a big step forward in implementing counter-measures against banking sanctions between Iran and Russia. "The two local interbank systems cannot be sanctioned and their infrastructure are not controlled by western governments," he was quoted as saying.
"The contract is the first step in the join action plan for banking cooperation signed last year by the two sides. This will pave the way for all Iranian banks to interact with Russian lenders.”
Gridchin expressed Russia’s interest in enhancing ties with Iranian banks noting that the agreement will help promote bilateral trade and noted that a defining feature of the deal is that it cannot be sanctioned.
SPFS is the Russian equivalent of the SWIFT financial transfer system developed by Russia’s central bank. It is in place since 2014 when the United States government first threatened to disconnect Russia from the SWIFT system.
SEPAM (a Persian acronym) currently functions as a venue through which interbank transactions are conducted electronically. It is said to be capable of being connected to foreign banks.
Cooperation between the two countries gained momentum last year amid western sanctions on Moscow and Tehran. Throughout 2022, the two sides reached agreements to expand cooperation, from barter supply deals for Iranian turbines, spare parts and aircraft equipment, to contracts for the joint construction of gas pipelines.
The CBI hosted a Russian delegation last month headed by Igor Yevgenyevich, aide to Russian President Vladimir Putin. The two sides discussed ways to further cooperation in banking and monetary affairs.
Central banks of the two countries have been working since 2017 to link their domestic payment networks. It was announced earlier that integration of Iranian and Russian bank card networks is expected to be completed soon.
Last summer, Iran prepared the infrastructure to join Russia’s Mir system. But after international sanctions were announced on Russia for invading Ukraine in February 2022 that cut off Russian bank access to SWIFT, the two sides decided to focus on creating a rival to SWIFT for cross-border payments.
Russia’s second largest bank, VTB, launched a new service allowing both individuals and businesses to transfer money to and from Iran, the lender said, RT reported earlier.
State-owned VTB, which has been subject to sweeping western sanctions since last February, has become the first lender to provide banking services to Iran, which is saddled with some of the toughest international banking/monetary restrictions for decades thanks to Washington’s belligerence.
Trade between Russia and Iran surged 15% last year, reaching $4.6 billion, Vyacheslav Volodin, the speaker of the State Duma, said earlier at a meeting in Moscow, RT reported.
According to the senior lawmaker, the two countries are actively taking steps to expand trade, which is “extremely important in the conditions of sanctions pressure on our countries.”
He welcomed the memorandum on free trade between Iran and the Russia-led Eurasian Economic Union (EEU), saying that it will take Russia-Iran trade to a “different level.”
According to Volodin, both countries should focus on boosting the efficiency of cooperation in the financial and banking sectors, in particular, by increasing the use of national currencies in settlements, by using the Russian ‘Mir’ and Iranian ‘Shetab’ payment systems.
“It is important to expand settlements in national currencies. Much has already been done in this regard – now the share of the ruble and the rial in mutual settlements exceeds 60%. Work on the joint application of national payment systems is being completed.
This will minimize the impact of [western] sanctions and also address issues related to mutually beneficial cooperation,” Volodin said.
