0454 GMT February 29, 2020
Speaking to Tasnim News Agency, Yahya Ale-Es'haq said negotiations between the central banks of Iran and Iraq are underway to reach an agreement on the use of the rial and dinar in bilateral trade.
Once finalized, the agreement would allow the banks of the two countries to issue letters of credit on the basis of Iranian rial and Iraqi dinar, he added.
Ale-Es'haq further noted that the value of Iran's exports to Iraq in the eight months from March 21 to November 21 reached $8 billion, which is equal to the total amount of exports to Iraq in the previous year.
Iran's Ambassador to Iraq Iraj Masjedi said on Sunday that the two countries have the potential to raise commercial exchanges to $20 billion in the coming years.
Addressing Conference on Boosting Iran-Iraq Economic Ties in Basra, he added that currently Iran's non-oil exports to Iraq stands at $10 billion, excluding the exports of gas and electricity.
Referring to operation of five consulates in Najaf, Karbala, Basra, Erbil and Sulaimanieh, he highlighted the significance of economic relations with the neighbors, and said, "We believe that Iran needs Iraq and Iraq needs Iran in this respect."
Describing the border of Basra as the line of friendship and boosting economic ties, he said that Basra can serve as a center for effective economic measures in bilateral economic relations.
Serious involvement of Iranian companies in Iraqi projects will help raise trade between the two countries, he said.
Conference on Boosting Iran-Iraq Economic Ties attended by officials and dozens of economic activists from the two countries opened in Basra on Sunday and ended on Monday.
On Saturday, Hamid Hosseini, the secretary general of Iran-Iraq Joint Chamber of Commerce said that Iran's exports to neighboring Iraq is witnessing an upward trend.
The official pointed out that Iran's exports to the Arab country stands at $45 million per day and sometimes the figure even reaches $70 million.
He noted that most of the oil and gas projects in Iraq are undertaken by European and Chinese contractors but he regretted that although Iranian companies have won bids to implement such projects in Iraq, a series of problems have prevented them from taking up the job.
Iraq's Foreign Minister Mohamed Ali Alhakim has made it clear that his country cannot cut off trade ties with Iran under the US sanctions, saying Iran-Iraq trade exchanges amount to $12 billion per year.
Meanwhile, on Saturday, Vice President of Iran-Iraq Chamber of Commerce Alireza Kolahi said that the two countries are finalizing one of the biggest electricity contracts to meet the needs of Iraq for turbines and electrical equipment at its power plants.
"The quality of Iranian electrical equipment is so high, that the Iraqi government has canceled its contract with the American General Electric, to import Iranian equipment," he said.
"Unfortunately, previous Iraqi energy minister did not cooperate with Iran in expanding bilateral trade. The minister prevented work of Iranian companies but the new energy minister is keen to cooperate, until now several agreements have been signed in the fields of energy which would be a positive step if they turn them into contracts," the official added.
"Iranian companies have been popular among Iraqi Shias and Kurds, after the defeat of Daesh in Iraq and the positive role of Iran in supporting the Iraqi people has created interest even among Sunnis," he said.
Kolahi noted that the trade between the two countries in the past eight months has been effected by lack of private sector trust in government and the foreign currency revenue return declaration between customs and Iran exporters.
"According to statistics, in the past eight months, Iran exported commodities worth $64 billion to Iraq. Oil and petrochemical products and steel were the major exports, while small part of it pertained to the private sector. However the pressure of foreign currency rate effected Iran private sector," he said.