Iran and Russia have concluded a deal to conduct trade using their respective local currencies, bypassing the U.S. dollar, as Iran’s state media reported on Wednesday.
The agreement was solidified during a meeting between the governors of the central banks of both nations in Russia, marking a significant step amid the challenges posed by U.S. sanctions on both Iran and Russia.
“Financial institutions and business entities are now able to utilise infrastructures, including non-SWIFT interbank systems, for transactions conducted in local currencies,” stated the Iranian state media.
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The development comes in the wake of members of the Russian-led Eurasian Economic Union (EEU) signing a comprehensive free trade agreement with Iran on December 25.
For Russia, Iran has become a crucial partner as Western sanctions, primarily in response to Moscow’s involvement in the Ukraine conflict, have constrained Russia’s foreign trade options, prompting the exploration of markets beyond Europe.
Highlighting the expanding collaboration, Iranian authorities have noted an increase in military cooperation with Russia. In November, Iran announced the finalisation of arrangements with Russia to acquire Su-35 fighter jets, Mi-28 attack helicopters, and Yak-130 pilot training aircraft.
According to a Reuters report, Iran’s air force has only a few dozen strike aircraft, including Russian jets, as well as ageing U.S. models acquired before the 1979 Islamic Revolution.
*Additional reporting by Reuters.
