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Iran, Turkey agree to increase use of local currencies in trade: Chief banker

Turkish President Recep Tayyip Erdogan (R) and Iranian President Hassan Rouhani (L) pose before their meeting at the Presidential Palace in Ankara on September 16, 2019. (AFP photo)

The governor of the Central Bank of Iran (CBI) says use of local currencies in bilateral trade with Turkey would increase thanks to new agreements reached on the sidelines of a high-profile meeting between presidents of the two countries.

 Abdolnasser Hemmati said on Monday after a meeting with his Turkish counterpart in Ankara that the two had agreed to increase the use of Iran’s rial and Turkey’s lira in trade between the neighbors.

He said in a post on his Instagram page that central banks of Iran and Turkey would seek to go beyond the current size of trade payments settled in local currencies, which he said is around 34 percent of the total exchanges between the two countries.

The announcement comes amid Iran’s efforts to use payment mechanisms that could protect trade with other countries from American sanctions.

Such schemes have been set up to accommodate exchanges with major partners like Iraq and India while the share of payments settled in local currencies in trade with Russia is also increasing.

Hemmati said Iranian President Hassan Rouhani had also discussed economic and trade ties with Turkey in his Monday meeting with Turkish counterpart Recep Tayyip Erdogan. The meeting came ahead of a trilateral summit on Syria involving Russian President Vladimir Putin.  

Trade between Iran and Turkey has remained largely unaffected by US sanctions since they were enacted in November.

Official estimates suggest that overall trade between the two is still at levels above $10 billion although Iran’s exports to Turkey, which mostly cover energy and petrochemicals, has slightly decreased over the past months.

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