The governor of Iran’s central bank says the country has totally scrapped US dollar in trade with Russia and Turkey, and trade partners are using their national currency instead.
According to Abdolnasser Hemmati, all financial transactions with Russia and 30-40% of transactions with Turkey are currently conducted using their national currencies.
“About 30-40% of trade with Turkey are conducted with national currency and the rest in euro … no dollar transactions,” Hemmati told reporters on the sidelines of a regular Cabinet meeting on Wednesday, IRNA reported.
Hemmati underlined the need to scrap USD from trade transactions to eliminate US domination over foreign trade, noting that the practice is gaining traction in many countries.
“To avoid the risks of currency devaluation and any potential loss on trading parties, figures are expressed in euro as the basis for conversion,” he said.
Despite the US sanctions hitting Iran’s banking transactions, the government has maintained its trade flow, particularly with neighbors.
Both Iran and Russia have announced connecting their domestic financial messaging services to replace the SWIFT (Society for Worldwide Interbank Financial Telecommunication).
Outlining details of his talks with the Russian delegation in Turkey, Hemmati said last week banks in both countries are now connected through the Russian SPFS and Iran’s SEPAM.
The initiative is aimed at safeguarding bilateral trade against third country sanctions.
“To protect bilateral trade and economic ties from the sanctions of third states, we are taking measures to expand direct settlements, use national currencies and establish interactions between the Russian financial messaging system and Iran's SEPAM, as an alternative to making payments through SWIFT," confirmed the Russian presidential aide, Yury Ushakov.
SEPAM (a Persian acronym) currently functions as a vehicle to conduct inter-bank transactions electronically. It is said to be capable of being connected to foreign banks.
Sheer Propaganda
Commenting on recent US Treasury sanctions against the Central Bank of Iran, Hemmati branded the move as sheer propaganda, saying the US has imposed the same old sanctions under a new label.
He, however, acknowledged that “sanctions have posed serious problems” for Iran’s banking relations, while reiterating that “we have found other ways to handle our issues”.
“We no longer seek to circumvent sanctions; now we are doing trade, irrespective of sanctions,” he said, without further elaboration.
Iran has used the barter system to evade such sanctions in the past, but the scale is bigger this time, especially with neighboring countries, such as Iraq, Pakistan and Afghanistan.
