Tuesday, March 19, 2024

Iran and Russia are collaborating more closely, using their respective national currencies—the Russian ruble and the Iranian rial—for over 60% of their mutual trade transactions, says the Head of the Iran-Russia Joint Chamber of Commerce. There’s been an acceleration in their efforts to reduce reliance on the U.S. dollar, with Iranian President Ebrahim Raisi urging the Central Bank of Iran to prepare to exclude the U.S. dollar from bilateral trade deals.

Strengthened Iran-Russia Partnership in Response to Sanctions

Hadi Tizhoush Taban, Chairman of the Iran-Russia Joint Chamber of Commerce, headquartered in Tehran, spoke about the two nations’ de-dollarization initiatives in an interview with Iran’s IRNA news agency on Friday. He shared that over 60% of Iran and Russia’s bilateral trade is now settled in Russian rubles and Iranian rials.

Taban clarified that the substantial sanctions imposed on Russia by Western nations, following its conflict with Ukraine, mirror those experienced by Iran. This shared predicament led to enhanced cooperation between the two countries. On President Raisi’s recent trip to Russia, both nations agreed to raise their yearly trade to $10 billion.

In addition, Taban revealed that the Central Bank of Iran’s (CBI) governor and the Iranian Parliament’s Economic Commission head recently visited Russia to reinforce the economic, monetary, and banking relationships. During their visit, they met with key Russian officials, including the deputy prime minister, the economic development minister, and the central bank head, to address monetary and banking collaborations, identify solutions to existing challenges, and expand investments. He stressed that this process helps them sidestep Western sanctions, tackle bilateral cooperation issues, and boost trade.

Taban also highlighted that Russia, with $2.7 billion in investments in two Iranian oil projects, has become Iran’s largest foreign investor. These investments represent approximately 45% of the total foreign investment in Iran from October 2021 to January 2023.

In recent news, Russian Foreign Minister Sergey Lavrov mentioned Russia’s active efforts to switch from the U.S. dollar to national currencies. Similarly, Alexander Novak, Russian Deputy Prime Minister, mentioned that the move to use national currencies in trade settlements has been effective, with only a minor portion of bilateral transactions still depending on the U.S. dollar.

Iranian President Raisi has called on the Central Bank of Iran to establish the necessary framework to abandon the U.S. dollar in bilateral trade settlements, promoting the use of the Iranian rial where possible. Last April, the secretary of Iran’s National Security Council highlighted the crucial role of the bilateral monetary and banking cooperation between Iran and Russia in countering Western sanctions.

Furthermore, Iran is exploring BRICS membership as a strategy to challenge Western dominance and endorse a multi-polar world. BRICS countries (Brazil, Russia, India, China, South Africa) have advocated for trade settlements in national currencies, replacing the U.S. dollar. The idea of a common BRICS currency is also on the table and expected to be part of the discussions at the forthcoming leaders’ summit of the economic bloc.

We would love to hear your thoughts on Iran and Russia boosting their cooperation and choosing to settle trades in their national currencies. Share your views in the comments section below.

Frequently Asked Questions (FAQs) about Iran-Russia Trade Settlements

What percentage of Iran-Russia trade settlements are conducted in their national currencies?

Over 60% of Iran-Russia bilateral trade transactions are settled in their national currencies, specifically the Russian ruble and the Iranian rial.

Who is leading the de-dollarization efforts in Iran?

Iranian President Ebrahim Raisi is leading the de-dollarization efforts in Iran, calling on the Central Bank of Iran to create the necessary infrastructure to eliminate the use of the U.S. dollar in bilateral trade settlements.

How has the conflict between Russia and Ukraine affected Iran-Russia cooperation?

The conflict between Russia and Ukraine has indirectly strengthened Iran-Russia cooperation. As both nations faced significant sanctions from Western countries, they found a common ground which led to enhanced cooperation and the increased use of national currencies in bilateral trade.

Which country is the largest foreign investor in Iran?

Russia is currently the largest foreign investor in Iran, with $2.7 billion invested in two Iranian oil projects, representing about 45% of total foreign investment in Iran from October 2021 to January 2023.

What are the implications of the strengthened Iran-Russia economic cooperation?

The enhanced economic cooperation between Iran and Russia has the potential to effectively circumvent Western sanctions, address challenges related to mutually beneficial bilateral cooperation, and boost trade between the two countries.

Is Iran seeking membership in any international economic group to counter Western dominance?

Yes, Iran is exploring membership in the BRICS (Brazil, Russia, India, China, South Africa) as a strategy to challenge Western dominance and promote a multipolar world.

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5 comments

JohnDoe June 4, 2023 - 11:45 pm

wow, didn’t know iran and russia were doing so much trade together. interesting stuff!

Reply
RickyB June 4, 2023 - 11:45 pm

This is huge. using national currencies over the US dollar is a game changer! What’s next?

Reply
Sarah_NYC June 4, 2023 - 11:45 pm

I wonder how this is gona impact the global economy. really makes u think, doesn’t it?

Reply
CryptoMike June 4, 2023 - 11:45 pm

Forget about traditional currencies guys, cryptos the future, dollar or no dollar!

Reply
EcoMinded June 4, 2023 - 11:45 pm

$10 billion in annual trade? Thats quite an amount…hope they’re considering the environmental impact too.

Reply

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