MPs Eager to Sideline US Dollar

EghtesadOnline: The Iranian Parliament has now boosted efforts to sideline the US dollar in Iran’s international deals following recent remarks by Leader Ayatollah Seyyed Ali Khamenei who called for the American currency to be eliminated from the country’s foreign trade.

News ID: ۷۴۴۳۴۰

06 November 2017

“The implementation of bilateral or multilateral monetary agreements prepare the grounds for eliminating the US dollar from economic deals, as reducing the dependency of deals on one or multiple currencies is one of the economic necessities and priorities of Iran,” Rahim Zare’, rapporteur of Majlis Economic Commission, told ICANA, the parliament’s official news portal.

He called on the Central Bank of Iran to not only make more endeavors to clinch monetary agreements, but to pay the way for their immediate implementation because this will help “strengthen the national currency in the long run”.

The latest bilateral monetary agreement was signed between Iran and Turkey in early October and finalized two weeks ago in Ankara, based on which the central banks of Turkey and Iran allocated a credit of 5 billion lira ($1.4 billion) and its equivalent in rial to their respective agent banks—Bank Melli Iran and Ziraat Bank—to be used as letters of credit with a repayment period of one year for both countries’ traders, according to Financial Tribune.

Continuous efforts to decrease the greenback’s dominating role have gained increased momentum in recent days after Iran’s Leader met with Russian President Vladimir Putin in Tehran on Wednesday and said “we can render US sanctions null by using methods such as eliminating the dollar and replacing national currencies in bilateral or multilateral economic deals”.

A member of Majlis Planning and Budget Commission has announced that the parliamentary body will convene in the coming days to review practical and executive solutions for removing the greenback from Iran’s trade deals.

Nabi Hezarjaribi added that the head of Management and Planning Organization Mohammad Baqer Nobakht and his deputies will also be invited to the meeting.

“When the majority of our trade is with East Asia and especially China, it is only appropriate that we have a replacement currency for the US dollar,” he told Fars News website.

Ahmad Anaraki Mohammadi, a member of Majlis Economic Commission, also called for focusing on currency swap and monetary deals to sideline the greenback, ICANA reported.

“Business deals must not be dependent on one or few currencies because based on previous experiences, this would make it possible for the US to try to take advantage of this again,” he said.

Commending the Iran-Turkey currency swap deal, the MP also called for similar deals with China, Russia and Iraq, saying the use of national currencies in trade deals will also play an important role in investments.

Mohammadi referred to the importance of reaching monetary deals with “countries that can be considered target markets for Iranian exports” with the ultimate aim of expanding and bolstering economic relations.

That is while China, Iran’s biggest trade partner, and Russia are reportedly renewing efforts to dilute the role of American currency in their foreign trade.

Moscow and Beijing are looking to extend the three-year $25 billion yuan-ruble swap deal and seek greater use of domestic currencies in trade, which helps cut dependence on the US dollar, reports Russia Today, the nation’s state-owned international television network.