Russia and Iran are cooperating in banking and are planning to ramp up the share of national currencies in mutual settlements, Russian deputy foreign minister, Andrei Rudenko, said.
"We are continuing to work with Iran, while promoting trade transactions in national currencies. The share of such settlements exceeded 60% in 2021. The positive trend continued last year," Rudenko said Friday in an interview with Interfax.
"The interaction with Iran has been actively developing at the level of central banks and credit institutions," he added.
"The establishment of a direct communication channel between Russian and Iranian banks through synchronization of national financial messaging systems, the SPFS and the SEPAM, was put on paper in late January of this year," he said.
Russia has "a systemic approach to increasing the number of transactions in national currencies with other interested partners."
According to the Russian Central Bank, "the share of ruble in the Russian foreign trade grew from 12.3% to 32.4%, while the share of Chinese yuan increased from 0.4% to 14% as a result of trade refocusing on Asia and the payment unit change in contracts, primarily those with companies from China" within nine months of 2022, Rudenko said.
"Another important step in this area is the SCO roadmap adopted last year to increase the share of national currencies in mutual settlements with a view to strengthening financial stability of member states and reducing the dependence of their economies on external factors," he noted.
Iran-Russia cooperation gained momentum last year amid western sanctions on Moscow and Tehran. Throughout 2022, both sides reached several 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.
In late January, the two central banks signed a deal to connect their national interbank communication and transfer systems to help 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 website of the Central Bank of Iran said.
Iran's Shahr Bank and Russia's VTB Bank will be involved in the related pilot program and other lenders will join gradually. The agreement was signed by the CBI deputy head for international affairs, Mohsen Karimi, and Vladislav Gridchin, on behalf of Russia’s central bank.
SPFS is the Russian equivalent of the SWIFT financial transfer system developed 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.
Central banks on both sides have been working on linking their domestic payment networks since 2017. It was announced earlier that integration of Iranian and Russian bank card networks is expected to be completed soon.
Stablecoin
In another update, Russian Ambassador to Tehran Alexei Dedov told RIA Novosti that Russia and Iran are exploring the possibility of using digital currencies for export-import needs, but a regulatory framework is needed.
"Issues of using digital currencies and digital financial assets in settlements for export-import transactions are being considered by both Russia and Iran. However, the process of reaching any specific agreements is still at the working stage," the diplomat said.
He stressed that the issue requires careful expert study, including the creation of the necessary legal framework.
