Azernews.Az

By Kamila Aliyeva

Iran and Russia are preparing to switch to the national currencies in mutual trade in the near future, Iran’s Central Bank Chief Valiollah Seif said.

He made the remark while summarizing the two-day visit to Moscow, Mehr news agency reported on March 29.

The issue was discussed with Russia’s banking officials during the visit, Seif said, adding that there are some restrictions for Russia’s Central Bank in this regard as its tasks are different from that of the Central Bank of Iran, so it was agreed that the issue will be followed by two other Russian banks.

Russia’s Gazprombank and Iran’s Melli Bank will deal with the issue at the first step, he said.

Seif further added that a joint bank account will be opened and the balance in the account will be settled in cash at the end of each quarter.

He said that once the switch to the national currencies becomes operational, the mutual trade between the two countries is expected to see a significant surge.‎

The idea to set up a joint bank account between Iran and Russia to handle trade in rials and rubles was first revealed by Iran’s Ambassador to Moscow Mehdi Sanaei earlier in 2015.

Later, Assadollah Asgaroladi, a veteran Iranian merchant and the chairman of Iran-Russia Joint Chamber of Commerce, said the switch to the national currencies could break the domination of Western currencies over bilateral exchanges, eventually opening a new chapter in trade relations between Tehran and Moscow.

In March 2015, Iran and Russia signed a basic agreement to create a joint regulatory body to oversee interbank financial transactions between the two countries, but, Western sanctions against Tehran have been the main obstacle.

Iran and Russia signed a Memorandum of Understanding to upgrade bilateral banking and financial cooperation in September 2016, which also aimed at facilitation of execution of the Bilateral Currency Swap agreements reached between the two countries.

According to the Federal Customs Service, the volume of Russian-Iranian trade turnover in 2016 increased by 70.1 percent and amounted to more than $2.18 billion. The Russian exports grew by 85.1 percent to more than $1.88 billion, imports - by 13.2 percent to more than $302 million.

Exports from Russia to Iran are dominated by shipments of machinery and equipment, food products, metals, timber and chemical products. The main imports from Iran in 2016 were food and agricultural raw materials (77 percent), chemical products (more than 16 percent), machinery and equipment, mineral products and textiles.

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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva

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