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Tehran, Baku may transit to trade in national currencies

3 February 2017 13:08 (UTC+04:00)
Tehran, Baku may transit to trade in national currencies

By Nigar Abbasova

Azerbaijan and the Islamic Republic of Iran may consider the issue of using their national currencies – the manat and the rial – in bilateral trade.

The issue has come in the spotlight following the announcement by the Central Bank of Iran (CBI) to stop using USD as its currency of choice in its financial and foreign exchange reports. The move appears to have been expedited after Washington included the country in a list of seven nations that are banned from entering the United States.

Iran is expected to either replace the US dollar with a new common foreign currency or use a basket of currencies starting from the beginning of the new Iranian calendar year (March 20, 2017).

A source familiar with the relevant financial issues told Trend that the option on using the national currencies between Azerbaijan and Iran is also on the table and the sides are studying the issue.

The source further said that there is a “proposed protocol” but the discussions between Tehran and Baku on the issue have not produced a concrete result so far, mentioning that the protocol was proposed after Turkish President Recep Tayyip Erdogan las called for making trade payments with Russia, China and Iran in national currencies.

Earlier, CBI head Valiollah Seif told Trend that the central banks of Azerbaijan and Iran intend to open settlement accounts in line with the memorandum of understanding (MoU) signed in August 2016.

He then mentioned opportunities for creating branches of Iranian and Azerbaijani banks in both countries.

The banking sphere is deemed to be one of the most prospective directions for the expansion of the Azerbaijani-Iranian cooperation. The sides have already started studying opportunities for integration of the two countries’ bank card systems. The integration of the systems means that both countries’ citizens will be able to use their bank cards in the two countries’ territories .The issue is currently being studied by a special expert commission.

The trade turnover between Azerbaijan and Iran amounted to $210.76 million in 2016, $49.68 million of which accounted for the export of Azerbaijani goods to Iran, according to the State Customs Committee of Azerbaijan.

The official exchange rate of Azerbaijan’s manat against USD was set at 1.9111 AZN/USD for February 3, while the rate of Iran’s rial is 32,363 IRR/USD.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

Follow us on Twitter @AzerNewsAz

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