State Media: Iran and Russia to Engage in Trade using Local Currencies instead of US Dollar

Iran and Russia recently signed an historic agreement to conduct trade using their own currencies, bypassing the U.S. dollar. This move is seen as a response to the economic sanctions imposed on both countries by the United States. The agreement was finalized during a meeting between the governors of the central banks of Iran and Russia, and is expected to have significant implications for their economies.

In a statement released by Iran’s state media, it was reported that banks and economic actors in both countries can now use non-SWIFT interbank systems to conduct trade in local currencies. This represents a major shift away from the traditional reliance on the U.S. dollar for international trade. The move is likely to have far-reaching implications for the global financial system.

The agreement comes at a time when both Iran and Russia are facing severe economic challenges due to the impact of U.S. sanctions. By trading in their local currencies, the two countries hope to mitigate the effects of these sanctions and protect their economies from further harm. The move also reflects a growing trend among some countries to reduce their dependence on the U.S. dollar in the face of geopolitical tensions.

The agreement is a significant development in the relationship between Iran and Russia, two countries that have been increasingly isolated by the international community. Both countries are members of the Russian-led Eurasian Economic Union (EEU), and the signing of a free trade agreement between the two parties late last year signaled a further deepening of their economic ties. The agreement to trade in local currencies is expected to further strengthen their economic partnership.

For Russia, the agreement with Iran comes at a time when the country is facing extensive sanctions from the West over its actions in Ukraine. These sanctions have severely limited Russia’s ability to engage in international trade, making it imperative for the country to seek alternative markets. The agreement with Iran offers Russia an opportunity to diversify its trade partnerships and reduce its reliance on European markets.

Similarly, for Iran, the agreement with Russia provides a lifeline at a time when the country is grappling with the impact of U.S. sanctions. By establishing a direct trade relationship with Russia, Iran hopes to secure a stable source of imports and exports, despite the challenges posed by the sanctions. The agreement is also part of Iran’s broader strategy to strengthen its ties with countries outside of the West and reduce its economic vulnerability.

Overall, the agreement between Iran and Russia to trade in local currencies represents a significant shift in the global economic landscape. The move is a clear response to the economic pressure exerted by the United States on both countries and reflects a growing trend among some nations to reduce their reliance on the U.S. dollar. It is likely to have major implications for the international financial system and could signal the beginning of a new era in global trade.

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