Iran and Russia have increased cooperation and settled more than 60% of their bilateral trade in the Russian ruble and the Iranian rial, according to the chairman of Iran-Russia Joint Chamber of Commerce. The two countries have ramped up their de-dollarization efforts with Iranian President Ebrahim Raisi calling for the Central Bank of Iran to lay the necessary groundwork to ditch the U.S. dollar in bilateral trade settlements.
Iran and Russia Increase Cooperation Amid Heavy Sanctions
The head of the Tehran-based Iran-Russia Joint Chamber of Commerce, Hadi Tizhoush Taban, discussed de-dollarization efforts by the two countries Friday in an interview with Iran’s news agency IRNA. He stated that the use of the Russian ruble and the Iranian rial in bilateral trade settlements between Russia and Iran has exceeded 60%.
The Joint Chamber chief explained that following the onset of the conflict between Russia and Ukraine, Russia was heavily sanctioned by Western countries, just like Iran, so the two countries strengthened their cooperation. He added that during Iranian President Ebrahim Raisi’s recent visit to Russia, the two countries agreed to increase the value of their annual trade to $10 billion.
Furthermore, Tizhoush Taban detailed that the governor of the Central Bank of Iran (CBI) and the head of the Economic Commission of the Iranian Parliament recently visited Russia to strengthen economic, monetary, and banking ties between the two countries. During their visit, the CBI governor held meetings with Russia’s deputy prime minister, minister of economic development, and the head of the Russian central bank to discuss monetary and banking cooperation, solutions to remove some obstacles, and investment expansion. He emphasized that this process effectively circumvents Western sanctions, addresses issues related to mutually beneficial bilateral cooperation, and increases trade.
The head of the Joint Chamber also noted that Russia has become Iran’s largest foreign investor, with $2.7 billion in investments in two Iranian oil projects, adding that this investment accounts for about 45% of the total foreign investment in Iran from October 2021 to January 2023. This week, Russian Foreign Minister Sergey Lavrov said Russia is actively shifting away from using the U.S. dollar in favor of national currencies. Russian Deputy Prime Minister Alexander Novak said last month that the call to use national currencies in trade settlements has been effective as only a small amount of bilateral transactions still rely on the U.S. dollar.
Iranian President Raisi has called on the Central Bank of Iran to lay the necessary groundwork to ditch the U.S. dollar in bilateral trade settlements and use the Iranian rial whenever possible. In April, the secretary of the National Security Council of Iran stated that the recent progress made in bilateral monetary and banking cooperation between Iran and Russia is essential for “dooming the illegal Western sanctions to failure.”
Iran is also seeking BRICS membership to counter Western hegemony and promote a multipolar world. The BRICS nations (Brazil, Russia, India, China, and South Africa) have been encouraging the use of national currencies to settle trades in place of the U.S. dollar. There is also a proposal for a common BRICS currency that is expected to be discussed at the economic bloc’s upcoming leaders’ summit.
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