Iran, Turkey to trade in own currencies

Iran’s media said on Sunday that the country is making the required preparations to trade with Turkey by using the local currencies of the two countries. 

Jalal Ebrahimi, the head of Iran-Turkey Joint Trade Council, said the idea for Tehran and Ankara to trade in rial and lira was raised during the recent visit to Tehran by the Turkish President Recep Tayyib Erdogan.

Ebrahimi said Iran and Turkey will pay each other through their own currencies in equal amounts to the dollar or the euro.

He said this was part of a package of proposals to ease trade between the two countries. Another solution, he said, was to start barter between the two countries. 

The official further added that the local currency payment mechanism will ease trade between Iran and Turkey, adding that the central banks of the two countries will provide the required guarantees. 

Ebrahimi said considering the recent depreciation of the lira against the dollar and the euro has already made Turkey to look for ways to use its own currency to settle payments in overseas trade.

He said an agreement over this has already been reached between the governments of Turkey and Iran, adding that the required measures to make it operational are currently underway. 

Iran had already announced that a similar mechanism with Russia to trade in mutual currencies of the two countries had just become operational.   

The mechanism provides a platform for Iranian and Russian businesses to use a Moscow-based branch of Bank Melli of Iran (BMI) to settle payments through ruble and rial.   

Both countries are subject to a series of draconian US-engineered sanctions that prevent them from using dollar for overseas trade among other things.  

The US and the European Union have imposed an array of embargoes on Russian individuals and businesses over the crisis in Ukraine.  The US and its European allies have also imposed sanctions against Iran over Tehran’s civilian nuclear activities.