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Iran Press TV

Turkey to create joint bank with Iran to help trade in local currencies

Iran Press TV

Mon Sep 17, 2018 02:58PM

Turkey is reportedly looking into a plan to establish a join bank with Iran to help both countries trade in local currencies as US pressures to restrict their access to the dollar are already mounting.

Ümit Kiler, the Turkish Representative Chairman of Iran-Turkey Business Council, wrote in a recent article in the Turkish newspaper Dünya that the plan would be put on the agenda of the Iranian and Turkish governments in the near future, stressing that the move would be crucial in promoting economic bonds between Tehran and Ankara.

Iran is under unilateral US sanctions, which have complicated transactions in dollars because they have to be processed through the American financial system.

Turkey is not under any specific sanctions but its rising tensions with the US and the Europeans over their support for Kurdish militants in Syria and other issues have made traders jittery and affected the country's economy.

Annual trade between Iran and Turkey currently stands at $11 billion, and the two countries have set a target of $30 billion for bilateral trade, according to reports by Iranian media.

"Establishing a joint bank through which the two sides could conduct bilateral trade and businesses without the need for US dollar would be the final step for developing economic relations," Kiler wrote in his article.

Kiler wrote in his article that the idea of establishing a joint bank between Iran and Turkey should be taken seriously, and that such a decision would help prevent US sanctions on Iran from harming Turkey's foreign trade.

He described US sanctions on Iran as "unfair and unlawful", saying Iran was an important country for Turkey.

The Turkish businessman further emphasized that a Turkish delegation would soon travel to Iran to discuss a plan to enable businesses on either side of the border to settle financial dues in local currencies.

This, Kiler said, would be in line with a recent proposal by Abdul-Nasser Hemmati, the governor of the Central Bank of Iran (CBI), raised on the sidelines of the trilateral meeting among Iran, Turkey and Russia in Tehran.

"In this line, an economic delegation comprising Turkish businessmen and managers of different economic sectors will travel to Iran in the next month to explore new ways of trade between the two countries and develop a roadmap for trade in the new post-sanctions era," he further added in his article.

In April, Iran said it had opened the first letter of credit for business transactions in national currencies with Turkey in an effort which was seen in line with a joint policy by Tehran and Ankara to ditch the US dollar and the euro in their bilateral trade.

Iran's central bank said the move came after months of anticipation, which followed an agreement signed between the two countries last year to use local currencies in trade instead of the mainstream foreign currencies.

Russia – also subject to a series of US sanctions – has also announced a plan which envisages payments in national currencies in trade with Iran and Turkey.

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