Economy, Business And Markets

Russia Trade Up

Russia Trade Up
Russia Trade Up

Trade between Iran and Russia is on the rise, as the two augment their economic ties to cushion the impact of Western sanctions imposed on each of them.

Their latest move is a proposal to make trade via a ruble-rial pair instead of using dollar or euro as intermediaries. This is under review by the countries respective central banks, though officials from either bank have not yet officially confirmed the news.

“If the dollar and euro are replaced by rial and ruble, trade between Iran and Russia will increase more easily,” said Assadollah Asgaroladi, the chairman of Iran-Russia Chamber of Commerce.

During Asgaroladi’s visit to Russia, two weeks ago, it was said that the two countries had agreed on eliminating the two major currencies (dollar and euro) from their bilateral trade transactions, but the proposal awaited confirmation from their central banks.

According to Asgaroladi, most of Iran’s exports to Russia are sent through Georgia, Azerbaijan and Kazakhstan -- the countries which export to Russia without paying tariffs. However, Russia imposes high tariffs on imports from Iran.

Some experts believe the two countries have been forced to increase bilateral ties as each has recently suffered from severe economic sanctions from the US and European Union.

Russia has since last year faced US-led sanctions over a dispute on the Ukraine crisis. Iran has also been under sanctions by the UN, US and EU over a nuclear dispute. Tehran and the six world powers – the US, Britain, France, Germany, Russia and China – has already reached an interim agreement over Tehran’s nuclear program. The two continue negotiations until the November 24 deadline to strike a permanent accord, which could lift sanctions.