Iranian exporters doing business with Russia are entitled to make use of the facilities provided by the Russian-based Iranian Mail Business Bank , Mojtaba Khosrowtaj, the deputy minister of industry, mine and trade, announced on Tuesday.
“The bank is tasked to open letters of credit (LCs) for the Iranians doing business with Russia,” he said, highlighting the ongoing expansion of economic ties between Tehran and Moscow as both sides are trying to forge new alliance in the face of western sanctions that have taken a heavy toll on both economies.
“Russia’s economy is under siege by falling oil prices, which creates opportunities for Iran to seize” he noted.
Falling oil prices have dealt a severe blow to Russia’s economy and its currency, the ruble. The currency is reported to have lost around one-third of its value against the dollar this year amid western sanctions and the sharp slide in oil prices.
The Russia’s finance minister recently said that if oil prices remain at their current low level and Russia’s economy fails to pick up, budget revenue may fall short by a trillion rubles ($21 billion).
“Negotiations are underway to designate a Russian bank in Iran which is ready to open LC for imports from Russia,” Khosrowtaj said, hoping that the recent the memorandum of understanding signed between Iran’s and Russia’s export guarantee funds will further ease bilateral trade between the two countries.
The Exports Guarantee funds of Iran (EGFI) and Export Insurance Agency of Russia (EXIAR) signed an MoU on Sunday in an attempt to provide finance to companies active in business, trade and investment, and provide insurance coverage to the Iranian and Russian-made products that are traded at the international level.
Trade between Iran and Russia currently stands at $1.7 billion in value, with officials expecting it to double in the near future.
Earlier, Head of Iran-Russia Joint Chamber of Commerce Asadollah Asgaroladi said that Iran and Russia were planning to establish a joint bank to broaden bilateral trade and bypass sanctions on the Islamic Republic’s banking sector.
