Economy, Business And Markets

Details of Iran-Russia Currency Deal Announced

Details of Iran-Russia Currency Deal AnnouncedDetails of Iran-Russia Currency Deal Announced

Details of a bilateral currency swap agreement between Iran and Russia was revealed on Monday. The deal was made to settle mutual payments by elimination of the US dollar and euro as trade intermediary currencies and use local currencies instead, a move the officials hope to alleviate the impact of nuclear-related sanctions on the economy.

Iran’s ambassador to Russia Mehdi Sanaei announced the move in a meeting held by Iran-Russia Joint Chamber of Commerce in Tehran on Monday. As approved by the governor of the Central Bank of Iran, Valiollah seif, several Russian banks can open rial accounts in Iranian banks to facilitate financial transactions, Banker news website reported him as saying.

The official also laid emphasis on the importance of “opening joint accounts” and “arranging barters” as new moves to help strengthen mutual financial relations, arguing that Russia already has such accounts in Chinese banks. “Opening the joint accounts in Iran has been placed on Russia’s agenda after the latest negotiations.”

Moreover, Sanaei pointed to Mir Business Bank (Moscow-based subsidiary of Iran’s state-run Bank Melli) and the foreign exchange office of Bank Melli in Tehran which are expected to facilitate money transfer, enabling Iranian exporters to receive their money. “During the last three years of the former administration (2010-2013), trade between Tehran and Moscow decreased by at least 25 percent, a trend that was later stopped and reversed,” he said.

The official believes the two neighbors can further extend bilateral trade, noting that Russia’s trade with some countries is ten times that with Iran.

 New Approval  

The Special Economic Measures Headquarters has sent a plan to the central bank for confirmation. If approved the plan would let the government and traders use the ruble and the rial, instead of the dollar and the euro, in bilateral trade, deputy minister of industry, mine and trade Mojtaba Khosrotaj said on Monday.

In Monday’s meeting, Khosrotaj said some measures have been taken based on which Iran can import goods in exchange for oil and non-oil exports to Russia, according to Mehr news agency.

Iran intends to use preferential tariffs for trade with Russia. Preferential tariffs will be lower than those levied on imports from third countries. Russia is also aiming to revise its trade tariffs regarding Iran. The office noted that a committee supervised by the director general of Trade Promotion Organization of Iran (TPO) is set to travel to Russia in June for further negotiations.