Hemmati announced that as per the agreements, Iraqi companies are allowed to open bank accounts in Iranian banks and conduct their transactions in dinar.
Additionally, the CBI will open euro and dinar bank accounts in Iraq which should be used for settling oil and gas export payments. “Surely we’ll see the favorable outcomes of the payment mechanism between the two countries,” Financial Tribune quoted him as saying.
He pointed to Iraq as Iran's biggest trade partner, saying that the banking ties need to be boosted in order to perpetuate bilateral commercial relations. “Given that Iraq is our biggest trade partner, Iranian exporters should be able to conduct their transactions via Iraqi banks”. “In the same manner, the Iranian banks are allowed to open dina accounts in Iraqi banks”.
Hemmati said Iran has reached similar solutions with other countries to open payment mechanisms including with Russia, Turkey, India, and China. Hemmati pointed to all-out US “economic war” against Iran and re-imposition of its detrimental sanctions which is aimed at disrupting economic and political stability of the country.
According to the CBI's website, Iraq’s past debts to Iran created by gas/ electricity imports from Iran are to be paid through the mentioned mechanism. The payment for future imports will also be settled within the same procedure.
Additionally, preliminary agreements were reached by both parties on devising mechanisms for repatriations of forex earnings of Iranian private exporters.
Ali Al-Allaq said the meeting is in line with previous financial agreements of the two parties to boost the economic ties. Iraq’s central bank will endeavor to remove the obstacles,” he said.
The head of Al-Rashid Bank proposed the opening of a branch in Iran. “If approved, the bank will play a significant role in facilitating Iran-Iraq transactions’, he hoped.
“Following our agreements about establishing Iraqi bank branches in Iran, I express my willingness for the proposal,” Hemmati said in response.
According to Iran Oil Minister Bijan Zangeneh, Iraq's overdue payments to Iran for electricity and gas imports amount to $2 billion, which Iraq says cannot pay because of US sanctions against its neighbor.