South Korea, Iran to Trade in Local Currencies

EghtesadOnline: South Korea says it has reached a deal with Iran to use local currencies in mutual trade between the two countries instead of the US dollar.

News ID: ۷۸۴۳۰۳

10 November 2018

According to Yonhap News Agency, the two countries "will restart the won-based settlement of bilateral trade transactions" using the accounts of the Central Bank of Iran at two South Korean banks: Woori Bank and the Industrial Bank of Korea.

"It's expected to provide South Korean firms with more opportunities for the trade of non-sanctions items such as medical products, processed food and home appliances, although the exports of some products including steel and automobile parts will be affected by the sanctions," Yonhap quoted an anonymous informed source as saying.

The move came after the US announced on Monday that it had restored all Iran sanctions that had been lifted in 2015 after a nuclear deal was signed between the country and the five permanent members of the Security Council – the US, Britain, France, Russia and China – as well as Germany, according to Financial Tribune.

Nevertheless, experts have emphasized that contrary to the goals which the US would try to achieve by renewing its sanctions against Iran, the bans would only have a limited effect on the country’s economy, while failing to affect its regional involvement.

Following the announcement of waivers, SK Innovation, South Korea's biggest oil refiner by sales, said it was planning loadings of condensate from Iran for early January.

SK Innovation said the waiver is for six months though it can be extended and that the company was looking to diversify supply sources.

The volume of bilateral trade surpassed the $12-billion benchmark last year, according to Iran’s ambassador to Seoul, Saeid Badamchi Shabestari, who told Press TV that Iranian and Korean economies complement one another.

The fact that Tehran-Seoul relations had been founded on “reality” would keep the countries determined to deepen ties in the face of America’s “hostile and illegal unilateral actions,” the ambassador said.

Earlier, South Korean ambassador to Tehran, Ryu Jeong-hyun, said that despite many European companies leaving Iran under the pressure of US sanctions, South Korean firms understand the significance of the Iranian market and have chosen to stay.