Iran and Russia start dealing with the riyal against the ruble.. Will they bypass US sanctions?

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Five years after the Iranian Supreme Leader Ali Khamenei held talks with Russian President Vladimir Putin on the need to remove the US dollar from the trade exchange between the two countries, the two leaders met again last Wednesday in Tehran to announce the launch of what they agreed on in 2017.

On the sidelines of Putin’s visit to Iran, the governor of the Central Bank of Iran, Ali Saleh Abadi, announced last Wednesday that Tehran and Moscow had started dealing in the Iranian riyal against the Russian ruble in their bilateral exchanges, and that commodity exporters could sell the ruble they obtained from the Russian side in the Iranian market to import goods from Russia. .

Coinciding with the two countries' deletion of the dollar currency from their trade exchanges, the Iranian currency exchange began trading in the Russian ruble and the Iranian riyal.

face sanctions

Observers in Iran believe that the adoption of national currencies in the exchanges of Tehran and Moscow comes in the context of facing US sanctions, and strengthening bilateral cooperation between them away from the global financial system "SWIFT".

In this context, economic researcher Gholam Reza Moghadam believes that US sanctions on Tehran's financial exchanges, especially on its oil exports, were a major reason for Tehran's proposal to adopt national currencies in its trade exchanges.

In his speech to Al-Jazeera Net, Moghadam described the deletion of the dollar from Iran and Russia's exchanges as a practical step to circumvent the US ban on their use of the global exchange system "SWIFT", explaining that Iran had officially joined the Russian exchange system in 2019 but had not yet reaped its fruit.

The Iranian researcher considered that the trade exchange in riyals and rubles will benefit the two countries that are subject to similar US sanctions, stressing that the two sides will work to expand the experience and apply it with other countries or include it in the current financial mechanism to turn it into an alternative financial system to Swift, which is subject to American hegemony, he said.

Moghadam added that the adoption of national currencies will not be without challenges for the Iranian economy, especially when the trade balance surplus tends to favor the opposite party.

Bilateral exchanges

For his part, the Iranian ambassador to Russia, Kazem Jalali, announced, in a televised statement, that the volume of trade between Tehran and Moscow rose from one billion and 600 million dollars in 2019 to 4 billion and 500 million dollars in 2021, without addressing the volume of trade between them at the present time, which raised Questions among Iranian circles about the volume of Tehran's imports and exports with Russia.

Through the statistics published by the Iranian Customs Organization, Al Jazeera Net found that Iran's trade with Russia during the first three months of the current Iranian year (beginning on March 21 last) amounted to 888,537 tons and 300 kilograms, with a value of 508 million, 309 thousand and 76 dollars.

According to Iranian customs statistics, Iran's trade with Russia during the same period last year amounted to 811,775 tons and 380 kilograms, with a value of 456 million and 867 thousand and 332 dollars.

Statistics show that Iran's trade with Russia during the first three months of the current Iranian year increased by 9% in volume and 11% in value.

Iranian exports to Russia during the past three months increased by 6% in weight and fell 15% in value compared to the same period last year, while Iranian imports from Russia increased by 15% in weight and 22% in value compared to the same period last year.

trade balance

For his part, economic researcher Karim Asadi described the Iranian trade figures with Russia as few and unbalanced and could not greatly affect the rise of the Iranian economy, adding that the continuation of the current pace of trade with Moscow will negatively affect Tehran, and demanded to raise Iranian exports to Russia until it becomes commensurate with import volume.

He confirmed to Al-Jazeera Net that bilateral monetary agreements are useful in circumventing foreign sanctions and facilitating trade between countries, and that Tehran and Moscow are among the world's major energy exporters, and the two parties do not have goods to promote bilateral trade between them, except for foodstuffs whose exports from Russia to Iran increased after the war. on Ukraine.

He pointed out that Russia is not among Iran's major partners in the world, but about 60% of Tehran's trade at the moment is with China, the UAE, Iraq, Afghanistan and South Korea.

Asadi concluded that the current Iranian government's strategy is to move towards Asian neighborhoods and markets in order to mitigate the repercussions of the policy of maximum US sanctions and nullify their effect, to show its determination to the Western side in the nuclear negotiations that it no longer needs to make concessions to revive the nuclear agreement.