Iran and Russia drop dollar for their own currencies in bilateral trade

Section:

Iran, Russia Replace Dollar with National Currencies in Trade Exchanges

From Fars News Agency, Tehran
Saturday, January 7, 2012

http://english.farsnews.com/newstext.php?nn=9007275648

TEHRAN -- Iran and Russia have replaced the U.S. dollar with their own currencies in their trade ties, a senior Iranian diplomat announced on Saturday.

Speaking to FNA, Tehran's ambassador to Moscow, Seyed Reza Sajjadi said that the proposal for replacing the dollar with the ruble and rial was raised by Russian President Dmitry Medvedev in a meeting with his Iranian counterpart, Mahmoud Ahmadinejad, in Astana on the sidelines of the Shanghai Cooperation Organization meeting.

"Since then we have acted on this basis and a part of our interactions is done in ruble now," Sajjadi stated, adding that many Iranian traders are using the ruble for their trade deals.

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"There is a similar interest in the Russian side," the envoy stated, adding that Moscow is against unilateral sanctions on Iran outside the U.N. Security Council, specially the recent sanctions against Iran's Central Bank.

Imposing sanctins on Iran's central bank "is unacceptable," Sajjadi said. "The Russians have clearly announced that they will not accept these sanctions and Iran's nuclear issue is resolvable just through negotiations."

Iranian President Mahmoud Ahmadinejad hit back at the United States after it introduced new sanctions against Iran's central bank.

President Ahmadinejad told an annual meeting of senior central bank officials that Iran's central bank would respond with "force" to the new U.S. sanctions intended to pressure Tehran to abandon its nuclear program.

He said the bank was strong enough to defeat "enemy plans."

The sanctions -- which cut off from the U.S. financial system foreign firms that do business with the central bank -- are part of a defense bill signed by President Barack Obama this month.

The extra U.S. sanctions aim to squeeze Iran's oil sales, most of which are processed by the central bank, although many people even in the West believe that the move would prove futile.

During the last two years Iran has been replacing the dollar with other currencies in its world trade.

Iran has replaced the dollar in its oil trade with India, China, and Japan. Late in November the Reserve Bank of India issued the needed permission to the Central Bank of Iran to open rupee accounts with two Indian banks, UCO and IDBI, as a long-lasting solution to the two countries' payment problems.

Both accounts were opened in the respective banks' Mumbai branches.

A top official of city-based UCO Bank said that while payments for his country's oil imports would initially be in rupees, it would be then converted into a separate currency, which was yet to be decided by the apex bank.

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