The Iranian government is deliberating the use of the Iraqi dinar as the primary currency for its trade with Iraq, in a move aimed at reducing the U.S. dollar’s sway. The yearly business between these two neighboring countries amounts to more than $10 billion, with a substantial number of pilgrims and medical tourists crossing the borders each year.
Tehran is championing the increased utilization of national currencies in international commerce, and sees the Iraqi dinar as a viable alternative to the dollar in its dealings with Baghdad, according to regional media sources. The implementation of the dinar over the U.S. dollar in Iran-Iraq trade could potentially diminish the dominance of the U.S. currency, suggests an Iranian official.
Yehya Eshaq, the head of the Iran-Iraq Chamber of Commerce, in a discussion with Iran’s Mehr News Agency, emphasized that transitioning to national currencies is a key goal for the current Iranian administration. “A majority of the global countries are striving to break away from American economic supremacy in their transactions, and national currencies can aid in accelerating this shift,” said Eshaq, before adding:
By prioritizing the dinar over the dollar in our trade with Iraq, we aim to challenge the dollar’s hold in our import-export operations, in line with a broader governmental strategy.
Eshaq, also quoted by Iraq’s Shafaq news agency, pointed out that conducting business in national currencies can hasten the shift away from the U.S.’s grip on international trade—a trend he believes is gaining momentum.
The annual trade of goods and services between Iran and Iraq currently stands above $10 billion, Eshaq noted, highlighting the potential advantages of a trade system based on the national currencies of the two countries. “Adapting to such a system could strengthen our bilateral relationship and promote stronger trade connections,” he added.
Eshaq underlined the potential for Iran and Iraq to reduce the dollar’s stronghold by maximizing trade in their national currencies. He stated that both countries could see benefits from this move, assuming the appropriate follow-up measures are taken.
These comments echo recent statements made by Iran’s President Ebrahim Raisi, who emphasized the urgency of moving away from dollarization. Speaking at a virtual summit of the Shanghai Cooperation Organization’s Council of Heads of State, Raisi claimed that any effort to establish a fair international system necessitates the removal of the U.S. dollar as the “instrument of dominance in intra-regional relations.”
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Frequently Asked Questions (FAQs) about Iran-Iraq Trade in Dinar
Why is Iran considering replacing the dollar with the dinar in trade with Iraq?
Iran aims to reduce the U.S. dollar’s influence in its international trade dealings. By employing the Iraqi dinar in its bilateral trade with Iraq, it hopes to challenge the global dominance of the U.S. dollar.
What is the current annual turnover between Iran and Iraq?
The yearly exchange of goods and services between Iran and Iraq exceeds $10 billion, which includes business generated from the millions of pilgrims and health tourists crossing the borders each year.
Who is advocating for the use of national currencies in foreign trade in Iran?
Yehya Eshaq, the head of the Iran-Iraq Chamber of Commerce, is strongly advocating for the use of national currencies in foreign trade. He considers this move a key priority for the Iranian government.
What are the potential benefits of Iran and Iraq using their national currencies in trade?
What has been Iran’s President Ebrahim Raisi’s stance on de-dollarization?
President Ebrahim Raisi has stressed the need for de-dollarization, asserting that a fair international system requires the removal of the U.S. dollar as an “instrument of dominance in intra-regional relations.”
More about Iran-Iraq Trade in Dinar
- Iran-Iraq Trade Relations
- Understanding the Dinar’s Role in the Middle East Economy
- Impact of US Dollar Dominance in Global Economy
- President Ebrahim Raisi’s Economic Policy