Economy, Business And Markets

Currency Deals With Neighbors

Currency Deals With NeighborsCurrency Deals With Neighbors

The central bank deputy governor for foreign exchange affairs announced on Sunday that several bilateral currency swap agreements have been signed between Iran and Turkey, Iraq and Russia, aiming to eliminate the US dollar and euro as trade intermediary currencies and use local currencies instead.

Gholamali Kamyab did not reveal any more specifics on the issue, ISNA reported.

Nuclear-related sanctions have barred Iranian banks from cooperating with multinational banks and since March 2012, SWIFT, the Society for Worldwide Interbank Financial Telecommunication, expelled as many as 30 Iranian financial institutions following US-led sanctions against Iran over its nuclear energy program.  The recent currency agreements are expected to alleviate the financial impact of the sanctions on the Iranian economy, officials involved in the issue believe, the agency said.

In March, a committee headed by Kamyab traveled to Russia to pursue negotiations with the Bank of Russia and finalize a bilateral currency swap agreement, a move that ended up reaching several agreements to expand the mutual trade relations.

The first such agreement dates back to 2001, when China and Thailand reached a deal called ‘Chiang Mai’. In May 2000 the ASEAN Plus Three (A forum of cooperation between the Association of Southeast Asian nations and the three East Asia nations of China, Japan and South Korea) countries met in Chiang Mai, Thailand, a meeting that led to the initiative.

There are over 50 bilateral currency swap agreements worldwide, 31 of which are signed between China and other countries. Japan, South Korea and Russia, respectively, stand in next places.