Iran, South Korea to boost trade based on won

Iran and South Korea have agreed to maintain their won-based trade as Seoul seeks to manifold economic exchange, reports say.  

Tehran and Seoul will keep the current won-based settlement system while seeking an alternative payment method that can further promote bilateral trade and investment, the Korean government said Tuesday, as reported by the Korea Times daily.

The paper added that following recent talks in Tehran, Korea’s Finance Ministry said the oil-rich country agreed to hold onto two Korean won accounts it has maintained over the years.

The two sides also discussed ways to use the euro, Chinese yuan and Japanese yen to create another medium for payment and clearance.

Officials from the finance and foreign ministries held talks with Iran's Central Bank representatives. Woori Bank and the Industrial Bank of Korea (IBK), which control Iranian accounts in Korea, were present at the gathering.

These bank accounts that contain some three trillion wons ($2.49 billion) are owned by Iran and were created in September 2010 to allow the two sides to conduct trade, the report added.

"Since South Korean companies bought more than they sold to Iran, the amount of money in the accounts has grown steadily over the years," a ministry source said.

Soaring Trade

Korea Times also said Tuesday that the government in Seoul had set its export goal to Iran at $6.3 billion this year.

It added that South Korea aims to treble exports to Iran within three years.

Korea Trade Assurance Corp. will conclude a basic financial agreement with Iran's Finance Ministry later this month and provide trade insurance worth $2 billion.

The Export-Import Bank of Korea has also decided to sign a similar accord valued at five billion euros with Iran's Central Bank to help Korean contractors receive orders for large offshore plants, they said.

Eximbank will also provide a credit line of $200 million to help Korean companies export industrial equipment and consumer goods as part of its short-term export-boosting package.

The Korean government made these and other decisions at an inter-agency meeting to promote exports to Iran, presided over by Assistant Minister of Trade, Industry and Energy Woo Tae-hee.

Korea and Iran will hold a joint economic committee meeting on February 29. At that meeting, the two countries will discuss activating seven subcommittees – industry-trade-small business, energy-resources, construction-environment, shipping-port, health-medicine, finance-treasury-customs and culture-ICT-science-e-government.

They also are scheduled to sign 21 memorandums of understanding in areas such as establishing electronic trade, financial support and hydroelectric power stations.

Korean government officials hope Tehran will import equipment and facilities to expand the production of cars and petrochemicals and increase imports of consumer goods such as home appliances, the newspaper report added.

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