Russia, Iran embrace national currencies for trade, boosting economic ties

Russia and Iran have successfully transitioned to almost complete settlements in national currencies for their mutual trade, signaling a significant shift in their economic relations.

The announcement was made by Russian Deputy Prime Minister Alexei Overchuk during his address at the 3rd Caspian Economic Forum in Tehran, Caliber.Az reports citing Russian media.

Speaking on the evolving trade dynamics, Overchuk highlighted the growing importance of national currencies in international transactions between the two nations. He revealed that, within the framework of the Eurasian Economic Union (EAEU), national currencies now account for over 92 per cent of mutual settlements. More significantly, Russia and Iran have adopted their own financial and banking message transmission systems, marking a near-total transition to national currencies in their bilateral trade.

This move forms part of the broader strategy laid out in the comprehensive strategic partnership agreement between Russia and Iran, signed in January 2024. The agreement aims to strengthen economic ties between the two countries and develop independent payment infrastructures to reduce dependency on external financial systems.

In addition to the shift in currency settlements, Overchuk emphasized the growing prospects of cooperation in several key sectors, including energy, automotive and aircraft manufacturing, shipbuilding, pharmaceuticals, and transport infrastructure development. These industries are seen as key pillars of the evolving trade and economic relationship between Russia and Iran.

Furthermore, Overchuk addressed the agreement on the creation of a free trade zone between the EAEU and Iran, which was signed in December 2023. Although the agreement has not yet come into effect, Overchuk noted that both parties are awaiting the completion of domestic procedures in Iran to formalize its validity.

Overchuk also pointed out that Iran's recent status as an observer member of the EAEU paves the way for deeper integration, allowing Iran to access documents and participate in open meetings of the union's governing bodies. He suggested that other countries in the Caspian region should also consider closer engagement with the EAEU to further regional cooperation and development.

This shift toward national currencies and strategic partnerships marks a significant milestone in Russia-Iran relations, with both countries poised to deepen their economic ties in the coming years.

By Vafa Guliyeva