Iran, Russia Firms Slowly Moving Toward Trade in National Currency

EghtesadOnline: Iranian and Russian companies are gradually trading in their national currencies, the chairman of the Russia-Iran Business Council (RIBS) said.

News ID: ۷۸۷۳۷۲

05 December 2021

"The mechanism for payment in national currencies became operational this year. Iranian companies importing from Russia pay in rials while the Russians buy in rubles," Vladimir Obydenov was quoted as saying by IRNA.

He did not provide details, but said the two sides had conducted trade worth $10 million in their national currencies.

Iranian traders' lack of familiarity with the two systems seems to be only factor hindering expansion of the bilateral mechanism, he noted

Obydenov added that the council has developed another mechanism for supporting two-way trade that is used by Russian businesses to outsource commercial services to a special center.

"Outsourcing helps protect Russian producers against the sanctions, as the center takes care of all the services [on behalf of producers]," he said.

He was referring to the unilateral US economic sanctions Donald Trump imposed in 2018 after he abandoned the international Iran nuclear deal. The economic blockade has disrupted Iran’s banking, shipping, insurance… ties with the outside world.

A company has been established specifically to function as  seller of goods made by a Russian company unwilling to directly trade with Iran due to some circumstances," Obydenov said.

"It buys goods from the producer and later enters into an agreement on their supply to the Iranian company.”

Private sectors of the two countries have stressed the need for using national currencies to be able to grow bilateral trade.

Despite the tough US restrictions sanctions, the Tehran government has maintained trade with neighbors to the best of its ability.

Iran-Russia trade reached $2.5 billion in the last Iranian year (ended March 20), according to Islamic Republic of Iran Customs Administration.

Import from Russia exceeded $2 billion during the period, registering an increase of 19% compared to the previous year while Iran’s exports to the country increased by 10% year-on-year to nearly $510 million.

The idea to trade in national currencies instead of the dollar or euro was first posed in 2014. In 2019, the Central Bank of Iran announced that Tehran had scrapped US dollar trade with Russia and some other trade partners were also using their national currency in deals with Iran.