Russia & Iran ditching dollar for trade in favor of national currencies – Moscow’s envoy to Tehran

Moscow and Tehran have “essentially” turned away from the greenback in bilateral trade, and are using the ruble and rial for payments, the Russian ambassador to the Islamic Republic has revealed.

Turning to cross-currency trade was a “vital” issue for both Russia and Iran, and the two countries are planning to use “all available means” to boost these efforts, Levan Dzhagaryan said in an interview with TASS.

“We have already essentially dropped the dollar in cooperation with the Iranians, we will rely on the Russian ruble and the Iranian rial, [and] in case of urgent need, on the euro, if we have no other options,” the diplomat said. He added that banking structures in both countries have the potential to cope with this “difficult” task.

Despite efforts by European countries to keep trading with the Islamic Republic after the US pulled out of the nuclear agreement, their efforts still do not fully address Tehran’s interests, Dzhagaryan believes.

The diplomat said that the payment system recently created by France, Germany and the UK to facilitate trade with Iran raises “more questions than it answers,” claiming that it does not change the state of affairs for Tehran.

He explained that the Instrument in Support of Trade Exchanges (INSTEX) covers only items not blacklisted by the US, but does not apply to vital sectors of trade for Iran.

“Oil is the most important [sector] for Iran. It is a huge question if Europe can allow the proper volume of oil exports and flow of revenue to the Iranian budget,” Dzhagaryan stated. “EU countries should show that they can carry independent foreign policy without fearing any warnings from overseas partners.”

Russia – along with several other countries, including India, China and Turkey – has been accelerating efforts to fight the dominance of the US currency in global trade amid rising tensions with Washington. Last year, Russian President Vladimir Putin called on the member states of the Eurasian Economic Union (EEU) to create a common dollar-less payment system for “boosting economic sovereignty.” The bloc, which consists of Russia, Kazakhstan, Belarus, Kyrgyzstan and Armenia, has free trade agreements with multiple partners across the globe, including Iran and China.

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