Top officials from the Central Bank of Iran and Turkey along with senior bankers met in Tehran on Sunday to discuss new ways of developing banking relations between the two neighboring states.
Leading the talks were Ahmad Araqchi, CBI's deputy for foreign exchange affairs, and Murat Uysal, vice governor of the Central Bank of Turkey, who called for expanding economic and trade ties for facilitating banking relations, CBI's official website reported.
"The currency swap agreement [recently signed between Iran and Turkey] is one of the measures of the central banks of both countries to continue and increase cooperation and is expected to be implemented soon as the infrastructures are set in place," Araqchi said.
Following several rounds of negotiations between Iranian and Turkish officials, the governors of the two countries’ central banks announced on Oct. 20 that the final agreement for conducting bilateral trade in local currencies has been signed.
Based on the agreement, the two banks allocated a credit of 5 billion lira ($1.32 billion) and its equivalent in rial to their respective agent banks, namely Bank Melli Iran and Ziraat Bank, to be used as letters of credit with a repayment period of one year for both countries' traders.
The currency swap agreement is aimed at reducing costs for both countries’ traders, as they will no longer need to use intermediate currencies since the specified agent banks are allowed to finance bilateral trading via international payment tools such as letters of credit and remittances in their local currency.
Iran and Turkey further aim to connect their bank cards in a move that will allow their citizens to benefit from mutual electronic banking services and facilitate tourism.
Expanding Strategic Ties
At Sunday's meeting, the Turkish central bank's official reportedly referred to the longstanding history of trade between Iran and Turkey, adding that expansion of these ties with Iran is of utmost importance to Turkey.
"The implementation of the currency swap agreement with Iran is an important part of Turkey's plan to expand strategic ties between the two nations," Uysal said.
The CEO and other top-level executives of Ziraat Bank and Halkbank were also present at the meeting. In addition to presenting their views on the currency swap agreement, they called for improving correspondent banking relations with their counterparts.
Mohammad Reza Hosseinzadeh, chief executive of Bank Melli Iran and director of the Association of State-Owned Banks and Credit Institutions, in and Kourosh Parvizian, chief executive of Bank Parsian and director of the Association of Private Banks and Credti Institutions, were Iran's top bank executives at the meeting.
Huseyin Ayd?n, CEO of Ziraat Bank who also heads Turkey's association of state-owned lenders, emphasized that his bank welcomes enhanced ties with its Iranian counterparts.
"While a number of Iranian banks have opened accounts with Ziraat, similar negotiations are underway with other banks. Ziraat Bank's account with Bank Melli Iran has also been opened," he said.
Osman Arslan, chief executive of Halkbank, sought to outline the current policies of the lender under his months-old leadership, and vowed that as before, the bank will "play its own role in expanding banking ties with Iranian banks".
Sunday's meeting follows a similar trip by an Iranian banking delegation led by Araqchi to Turkey with the aim of developing bilateral banking ties.
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