News ID: 202749
Published: 0334 GMT October 20, 2017

Turkey, Iran will use national currencies in trade

Turkey, Iran will use national currencies in trade

Turkey and Iran will use national currencies in trade to further improve mutual turnover between the two countries.

This was announced by Iran's First Vice President Es'haq Jahangiri in a joint press conference with Turkish Prime Minister Binali Yildirim in Ankara, reported.

He noted that Ankara and Tehran are keen on strengthening bilateral trade and economic relations and the use of the national currency will help increase trade turnover.

Earlier, during Turkish President Recep Tayyip Erdogan's visit to Iran, the twom countries reached an agreement on using national currencies in trade.

Jahangiri further stated that Iran can also increase oil and gas supplies to Turkey.

Turkey and Iran have a common stance on settling conflicts in the region, he noted, adding, "Muslim countries should jointly solve problems."

Iran and Turkey are considered regional rivals but have recently sought to maintain a pragmatic relationship, with the Islamic Republic strongly supporting Erdogan after last year's failed coup.

Both countries share sympathy with Qatar in a diplomatic rift between the Persian Gulf emirate and its neighbors which erupted in June.

Trade between Iran and Turkey in the first quarter of 2017 amounted to $3.5 billion, according to the Turkish Institute of Statistics (TUİK). In 2016, the trade between the countries amounted to $9.66 billion.

Iran and Turkey signed an initial agreement on the use of national currencies in bilateral trade earlier this month during a visit to Ankara by Valiollah Seif, the governor of the Central Bank of Iran (CBI).

"Based on the deal, Iranian rial and Turkish lira can be easily converted and merchants on both sides of the border can accordingly use those currencies for trade activities," Seif was quoted as telling reporters.

The official underlined this could help cut costs in converting and transferring currencies.

He added that the banks of the two countries can use international payment mechanisms to convert the national currencies.

The deal allocated a credit line of five billion liras and equivalent amount in Iranian rials to facilitate the opening of letters of credit by merchants on both sides of the border.

Central banks of Iran and Turkey further agreed to cooperate in creating a switch platform to connect their banking networks thus enabling citizens to use the services of respective lenders in the two countries.

The currency swap deal with Turkey is the first of its kind that the Islamic Republic has sealed in what appears to be a cornerstone of the country's strategic plans to reduce vulnerability to US economic pressures.

Even with the removal of US sanctions against Iran, Iran is still grappling with Washington's ban on accessing the dollar which is believed to have been instrumental in keeping foreign investors away from the huge investment potentials in Iran.

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