Azernews.Az

By Sara Rajabova

Russia and Iran have reached a consensus on establishment of a joint bank, which had been under discussion for some time.

Mehdi Mohtashemi, the deputy co-chair of the Russian-Iranian intergovernmental commission said Iran approved the Russian proposal to establish a bank for investment in joint economic projects.

The bank will initially focus on investment in bilateral trade and other joint economic projects.

"The initial capital will, probably, total $500 million. The capital could be increased when the cooperation in trade and joint projects grows," Mohtashemi told RIA Novosti.

Iran’s Ambassador to Russian Mehdi Sanaei said in January that Tehran and Moscow are working on a plan to switch their bilateral trade to national currencies, for which he said the two countries will create a joint bank or a mutual account.

Russian trade representative in Iran Andrei Lugansky has recently noted that establishment of the Russian-Iranian bank would be very useful.

However, Kamran Dadkhah, a professor of economics at Northeastern University in Boston, Massachusetts told AzerNews that the usefulness of the Russian-Iranian bank will depend upon its charter and organization.

“If it operates on the basis of international banking rules using international currencies (the dollar and euro), it would be acceptable. But if it is under the influence of Russian authorities, then Iran should avoid it,” the expert warned.

Later in March, Iran and Russia signed a basic agreement to create a joint regulation body to oversee interbank financial transactions between the two countries.

The agreement that was signed between the Iranian and Russian central banks was regarded as a one step closer ahead toward the establishment of the promised joint bank - which is believed to have been specifically designed to help dodge the effects of U.S.-led sanctions on the two countries.

Russia was the 18th major importer of Iranian non-oil goods during the previous Iranian calendar year, which ended on March 20, with imports and exports totaling $296.509 million and $667.18 million of non-oil goods to and from Iran, respectively, according to the Iran Customs Administration.

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Sara Rajabova is AzerNews’ staff journalist, follow her on Twitter: @SaraRajabova

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