Iran, Turkey sign deal to trade in national currencies
Iran and Turkey signed a draft agreement to conduct trade in their own currencies instead of traditional foreign currencies such as the euro and the dollar.
The agreement was signed during a visit to Ankara by the Governor of Central Bank of Iran (CBI) Valiollah Seif, reported IRNA.
“The agreement is meant to help pave the ground for expanding economic relations between Iran and Turkey and also facilitate trade in the currencies of the two countries,” said Seif.
“Based on the deal, Iran’s rial and Turkey’s lira can be easily converted and merchants on both sides of the border can accordingly use those currencies for trade.”
The official underlined that this could help reduce the costs in converting as well as in transferring the currencies.
He added that the banks of the two countries can use international payment mechanisms to convert rials to liras and vice versa.
Seif stated that the draft agreement would be finalized in the upcoming meeting of the joint economic commissions between the two countries and would thus come into effect immediately.
He said that the initiative was in line with a mandate endorsed by the presidents of the two countries to boost trade ties to $30 billion per year.
“The potential to boost Iran-turkey trade relations to $30 billion exists but the barriers to this need to be overcome one by one,” Seif noted.
“One important barrier was the limitations in banking channels of the two countries. The agreement to trade in national currencies can help overcome this.”
Last week, Iranian and Turkish presidents confirmed that the Turkish and Iranian energy ministers will enable further cooperation in the sector.
While Iran’s crude oil exports to Turkey are on the rise, the country also ranks second in natural gas exports to Turkey.
Last year, Turkey imported 7.7 billion cubic meters (bcm) of natural gas, which corresponds to 16.62 percent of the country’s total gas imports. Energy trade will further be supported following negotiations between the energy ministries.
Iranian President Hassan Rouhani invited Turkish investors to invest more in Iran’s tourism while Turkey’s Recep Tayyip Erdogan also called Turkish tourism sector to increase investments in the country, citing the rich cultural history of Iran and expressing Turkey’s willingness to share its tourism experience with its neighbor.
Rouhani also said that the Iranian government would facilitate investments by Turkish businesses in tourism, infrastructure and logistics. The two leaders said that Turkey and Iran are also ready to develop joint tourism agencies to boost bilateral tourism activities.
Meanwhile, Turkey has recently seen an increase in the number of tourists. For instance, reports state that the number of Iranian tourists to Istanbul has seen an upward trend in recent years and could soon surpass the number of German visitors, partially as a result of the economic recovery experienced after a nuclear deal lifting sanctions on Iran.
Data from the Istanbul Provincial Directorate of Culture and Tourism showed that 386,339 Iranians visited Istanbul in 2013, while the number grew in the following years to 590,920 in 2014, 755,707 in 2015 and 337,259 in the first six months of 2017.