Russian and Iran central banks increase co-operation
The central bank governors of Russia and Iran have agreed to strengthen their co-operation in avoiding the effects of international sanctions, Iranian state-owned media reported. Bank of Russia governor Elvira Nabiullina and the Central Bank of Iran's Mohammad Reza Farzin met in Moscow on December 27, NourNews said. The two governors finalised an agreement on using their own countries' currencies in bilateral trade instead of the US dollar, it said. Both countries are subject to tough financial sanctions regimes by the US and its allies. After Russia invaded Ukraine in 2022, the US-led alliance greatly increased sanctions. Iran has become a major arms supplier to Russia during the war, and the two sanctioned countries have considerably increased their trading and other links. At the same meeting, Russia's largest savings bank Sberbank and Iranian lender Bank Melli agreed a credit line worth 6.5 billion rubles ($71 million). The two countries signed a memorandum of understanding in January 2023 to link their banking systems with this aim. On December 25, the five Eurasian Economic Union countries – Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia – signed a free trade agreement with Iran.
Russian president Vladimir Putin attended the signing ceremony. Russian and Iranian central bank officials also discussed how to connect their financial systems without using the international messaging system Swift. The US successfully lobbied the system to exclude Iran in 2012 and Russia in 2022, as part of the sanctions regimes on both countries. Farzin also raised the issue of using the Brics alliance to enhance trade, Russian news agency Tass said. The Brics organisation, whose name derives from its original members Brazil, Russia, India, China and South Africa, has since admitted several more members. Iran joined in 2023 alongside Argentina, Egypt, Ethiopia, Saudi Arabia and the United Arab Emirates. Russia will host a Brics summit in 2024.
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