Russia, Turkey and Iran refuse the dollar

On the weekend, the presidents of Russia, Iran and Turkey met in Tehran to discuss the progress of the Astana process and promote the Syrian settlement. However, as it turned out, some important economic decisions concerning the interaction of the three countries were also adopted during the summit.

As Daily Sabah writes in the article Turkey, Russia, Iran agree to use local currencies in trade, Turkey, Russia and Iran have agreed to use their local currencies for trade between the three countries, according to Central Bank of Iran Governor Abdolnaser Hemati. Hemati told media Saturday that a meeting with the administrators of the Turkish and Russian central banks is expected in the near future and he hopes that the agreed topics will come into effect quickly. The governor termed the meetings in Tehran that saw the participation of Russian President Vladimir Putin and President Recep Tayyip Erdoğan during the trilateral summit on Syria as fruitful. Hemati said they had agreed on the trade of petroleum, gas and fundamental products, and also agreed on some banking issues. The three countries agreed that the U.S. dollar should not be used for trade, Hemati said. He added that transactions will be made over designated currency exchange rates. 

The sanction policies by the U.S., particularly related to Turkey, Iran and Russia, have recently triggered the issue of looking for an alternative medium for financial transactions that can decrease the domination of the dollar in global trade.

President Erdoğan said earlier that Turkey was preparing to increase trade with its top trade partners, including Russia, China, Iran and Ukraine, in local currencies instead of the U.S. dollar, adding that they were also ready to do the same with European countries.

The call had garnered support from Moscow, with the Kremlin saying Russia has been pushing for an arrangement with all countries to conduct trade in national currencies. Russian car manufacturers have said they were preparing to switch to national currencies for payments to Turkey for supplies of components, according to Russian Industry and Trade Minister Denis Manturov. The minister also told the Sputnik news service that Russia was actively working to switch over to settlements in national currencies with countries in the Middle East, Southeast Asia, Latin America and Africa.

In April, Turkey and Iran issued the first letter of credit in the form of a national currency swap to exchange the Iranian rial and Turkish lira. The swap will ease trade and transactions between the two countries and lower foreign currency risks after both currencies faced depreciation recently. Moreover, Turkey is also preparing to issue the first renminbi-denominated bonds this year.

Sputnik said last week that commercial banks from Russia and Iran had recently agreed to pay for bilateral supplies of products in national currencies.

Iraqi-Iranian Chamber of Commerce Chairman Yahya al-Ishaq announced last week that Iraqi authorities had also decided to stop using the dollar in trade settlements with Iran in favor of national currencies and the euro.