Iran, Russia Agree to Trade in Nat’l Currencies

EghtesadOnline: The commercial banks of Russia and Iran have agreed to pay for bilateral supplies of products in national currencies, the Central Bank of Russia said in a statement on Friday.

News ID: ۷۳۶۵۳۳

03 September 2016

According to the statement, the agreement was signed on Thursday in the course of the Fourth Plenary Session of the Permanent Russian-Iranian Commission on Trade and Economic Cooperation’s working group on financial and banking cooperation in Iran.

The Russian delegation was headed by Bank of Russia Deputy Governor Dmitry Skobelkin, while the receiving party was headed by deputy governor of the Central Bank of Iran for international affairs, Gholamali Kamyab, Sputnik reported.

The central banks also signed an agreement to expand bilateral relations, particularly in areas related to anti-money laundering efforts and countering the financing of terrorism. The two sides also pledged to link the two countries’ payment networks and reiterated the need for increasing the use of local currencies in trade and settlements.

Kamyab noted that measures taken to enhance banking relations between Russia and Iran were not sufficient, calling on the working group to find practical solutions to ease financial transactions between the two allies, CBI’s website reported.

Rising Interactions

Earlier in July, it was announced that Gazprombank, a major Russian lender, is starting activity in Iran along with other Russian banks, according to Financial Tribune.

The Russian TEMP Bank also announced plans to launch its representative office in Tehran. RFC Bank announced readiness to open letters of credit for Iranian businesses.

Bank Melli Iran and Russia’s VTB bank reached agreements to expand relations. Mir Business Bank, a subsidiary of Bank Melli Iran in Russia, is currently the sole Iranian lender providing services to traders in Russia. Export Development bank of Iran has also put its focus on facilitating trade with Russia.

“Opening a joint account in the central banks of the two countries should also be discussed,” Kamyab said, adding that measures to ease banking relations would help expand trade between Russia and Iran.

Kamyab said Russia is a reliable partner of Iran in various sectors.

Iran and Russia are trying to lift trade volume from $2 billion annually to $3 billion next year.

Linking Banks

Kamyab urged experts to start devising ways of linking Iranian methods to make the use of banks cards possible in other countries, “in accordance with international standards”.

Skoblekin called for connecting banking networks of the two countries and said expansion of banking relations should benefit both commercial entities and the ordinary citizens.

“Since the lifting of sanctions in January, Central Bank of Russia has emphasized the expansion of ties with Iran to help boost commercial relations with Iran and ease mutual investments,” he added.

Mostly because of unilateral US sanctions that remain in place, major European banks and investors are anxious about doing business with Iran.

So far, Iran has revived banking ties mainly with smaller financial institutions while US banks are still banned from doing business with Iran, directly or otherwise.

However, CBI officials have hinted that some major European banks are also warming up to Iran.