Iranian-Azerbaijani joint bank to increase financial transfers
By Aynur Karimova
The establishment of a joint bank between Azerbaijan and Iran will not only increase the volume of financial transfers, but also lead to the expansion of trade and economic relations between the two countries.
This remark was made by Vugar Bayramov, the chairman of the center for economic and social development, on June 23.
Commenting on Iranian Ambassador to Azerbaijan, Mohsen Pak Ayeen's recent statement about Baku and Tehran's intention to establish a joint bank, the expert told AzerNews that in recent years, one of the most serious problems in the economic relations between the two countries was the implementation of financial transfers.
Ayeen earlier told Trend that the two countries are planning to use national currencies in economic transactions and expand barter trade.
"The establishment of a joint bank will practically pave the way to the financial concentration in this field and make a positive impact on relations between Iran and Azerbaijan," he said. "Also, the establishment of this bank means that a new bank will enter to the banking system of our country. Thus, the establishment of a new and joint bank will have an affect over the rivalry in this sector."
Bayramov noted that the bank is expected to engage in financing import-export operations. "In this regard, the establishment of a new bank will not affect the operations of existing local banks."
Kamran Dadkhah, a professor of economics at Northeastern University in Boston, Massachusetts, believes the establishment of a joint bank “is a very good idea” as any cooperation on trade and finance between the region's countries would be beneficial to all parties involved.
The expert told AzerNews that "such a bank should operate on sound internationally accepted financial procedures."
Dadkhah also mentioned the importance of such a bank to operate on dollar basis.
"The exchange rates for both countries should be determined by market forces of supply and demand," he added.
The joint bank, to be established in Tehran in the near future, is believed to facilitate bilateral trade.
Azerbaijan and Iran have had diplomatic relations since 1918. Iran recognized Azerbaijan's independence in 1991, and diplomatic relations between the two countries were reestablished in 1992.
Currently, the two countries are focused on expanding their economic ties and developing cooperation in various fields—industry, agriculture, energy, alternative energy, and transportation.
Tehran has in recent years focused on expanding ties with neighboring countries, including Azerbaijan, which enjoys religious, historical, and cultural commonalities with Iran.
Azerbaijan was the 12th leading importer of Iranian non-oil
goods in the previous Iranian calendar year, which ended on March
20, 2015, according to the Iran Customs Administration.
Iran exported $435.3 million of non-oil goods to Azerbaijan and
imported $22.2 million of non-oil goods from the country.
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Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova
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