Iran and Russia have reached a significant agreement to conduct trade using their local currencies instead of the U.S. dollar, according to Iran’s state media. The finalization of this agreement took place during a meeting between the governors of the central banks of both countries in Russia. This move is particularly significant as both Iran and Russia are currently facing U.S. sanctions.
The state media further stated that banks and economic actors can now utilize infrastructures, including non-SWIFT interbank systems, to engage in transactions using local currencies. This development comes after members of the Russian-led Eurasian Economic Union (EEU) signed a comprehensive free trade agreement with Iran on December 25th.
The importance of Iran as a trading partner has grown for Russia due to Western sanctions imposed on Russia following its conflict in Ukraine. These sanctions have limited Russia’s foreign trade routes, prompting the country to seek alternative markets outside of Europe.
In addition to economic cooperation, military collaboration between Iran and Russia has also been expanding. In November, Iran announced that it had finalized arrangements with Russia to acquire Su-35 fighter jets, Mi-28 attack helicopters, and Yak-130 pilot training aircraft.
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