Hemmati: Initial Agreement Between Iran, Russia, and Turkey to Eliminate Dollar from Financial Transactions

The head of Iran's Central Bank announced, without providing details, that there are initial agreements with Russia and Turkey to eliminate the dollar and conduct economic transactions using the national currencies of the three countries. Abdolnaser Hemmati, during his visit to Moscow, stated in an interview with IRNA and Sputnik news agencies that 30% of Iran's trade with Russia is conducted in national currencies. According to Hemmati, the two countries intend to increase the volume of transactions in national currencies. The head of Iran's Central Bank also mentioned that a plan to connect the banking systems of the two countries is being pursued, but there are 'differences of opinion' between the central banks regarding this. Hemmati also indicated that Iran and Turkey have reached 'initial agreements' to eliminate the dollar in national transactions. He did not elaborate on the details of the initial agreements with Russia and Turkey. Turkish President Recep Tayyip Erdoğan had announced two years ago that his country intends to take steps to conduct trade with Russia, China, and Iran using the local currencies of these countries, namely the ruble, yuan, and rial. Meanwhile, the leader of the Islamic Republic stated on Friday, September 7, during a meeting with Vladimir Putin, that the sanctions against Iran, Russia, and Turkey by the U.S. represent 'a very strong common point' for expanding cooperation among the three countries and emphasized conducting economic transactions outside the dollar framework. Following this, Ali Akbar Velayati, an advisor to the leader of the Islamic Republic, reported negotiations with the Russian President and Chinese officials to use their currencies in Iran's financial transactions, stating that they would no longer 'need' the dollar. The idea of trading with national currencies arises while, during the previous round of sanctions against Iran before the JCPOA, the money from Iran's oil sales was blocked in some countries like China, India, Japan, and South Korea. Simultaneously, some countries like India and China committed to paying for oil purchases from Iran in rupees and yuan, but Tehran was forced to use this revenue to buy goods from these countries, which, according to economic experts, were of low quality. Yahya Al-Ishaq, the head of the Tehran Chamber of Commerce, stated in 2014 that Iran has 'about 100 billion dollars of frozen currency' in countries like China, India, and Japan, but 'cannot quickly utilize them.' Nevertheless, Tehran officials have once again spoken about the plan to eliminate the dollar in financial transactions after the U.S. withdrawal from the JCPOA and the re-imposition of its sanctions. Additionally, the Islamic Republic's officials' confidence in Russia comes at a time when Hossein Kazempour Ardebili, Iran's representative at OPEC, stated on September 15 that Moscow, along with Saudi Arabia, is seeking to 'capture part of Iran's share' in the oil market. Meanwhile, some analysts interpret Russia's recent actions in Syria as meaning 'betraying' the Islamic Republic.