Economy, Business And Markets

Russia, Iran to Deal in Nat’l Currencies

Russia, Iran to Deal in Nat’l CurrenciesRussia, Iran to Deal in Nat’l Currencies

The Russian Agency for Export Credit and Investment Insurance (EXIAR) and its Iranian partners have agreed on mutual guarantees for transactions in national currencies, its CEO Alexey Tyupanov announced.

 EXIAR is a subsidiary of Russia’s VEB development bank, which provides insurance cover for export and investment transactions from commercial and political risks. In Iran the agency cooperates with the Export Guarantee Fund.

“We’ve agreed to share risks. If we have projects in Iran they may guarantee them to us and vice versa. We’ll battle the scheme out, starting from small sums of 10-20 million dollars,” Tyupanov told TASS News Agency.

 Russia and Iran plan to boost mutual trade turnover from the current $1.7 billion to $10 billion while one of the most serious obstacles for doing this is the impossibility of payments in dollars or euro with Iranian banks due to sanctions. According to Tyupanov, increasing the volume of transactions in national currencies without participation of a third country’s banks is one of the ways to circumvent restrictions of payments with Iran.

“We’ll try to cut deals in national currencies. Our main task is to ensure that if Iranian export flows to Russia it will not flow via grey schemes in various countries but in ruble-rial pair via correspondent accounts in Russian banks,” the CEO said, adding that the scheme of payments in national currencies will become sustainable only if the volume of Russian imports from Iran are comparable with export volumes.

 “It’s not only important how much goods we sell to Iran but also how much Iran sells to us as for transactions in national currencies it’s necessary for them to hold rubles,” he added.

Last week, Russian Minister of Industry and Trade Denis Manturov held talks with officials from Iran’s Central Bank on establishing correspondent relations between the two countries’ commercial banks.

“We spoke about how to form a mechanism at the level of the central banks to establish correspondent relations between commercial banks of the two countries,” the minister said, adding that several Russian commercial banks were considering possibilities of cooperation with their Iranian peers.