Iran, Russia set to drop US dollar as currency in bilateral trade settlements

09/02/2022 / By Ramon Tomey

Russia and Iran have announced plans to drop the U.S. dollar as a currency in some areas of their trade relations.

A report by Russian news agency TASS confirmed this development, quoting remarks made by Central Bank of Iran (CBI) Gov. Ali Saleh Abadi to an Iranian newspaper.

“Iran and Russia have already switched to national currencies in some types of settlements they mutually agreed upon. Both sides are making efforts to extend this mechanism to other areas of bilateral trade,” Abadi said.

“Tehran and Moscow have long been looking for such a mechanism to replace the American dollar, despite the tough economic sanctions imposed on both states. The use of the Iranian and Russian national currencies, the rial and the ruble, is one of the priorities on the economic agenda of the administration of Iranian President Ebrahim Raisi.”

The two nations had been at odds since the imperial period, but relations warmed and subsequently strengthened after the dissolution of the Soviet Union in 1991. Both have also found themselves on the receiving end of sanctions from the West – Tehran over its nuclear program, and Moscow over its attack on Ukraine.

They also share common enemies in the form of the Western powers and various Sunni Islamist military groups funded by the U.S. and its allies. Their shared enemies and sanctions from the West forged an unlikely alliance that has now alerted Washington.

A report by the Wall Street Journal attested to this alliance, citing three instances. In July, Iran became the world’s biggest buyer of Russian wheat. Moscow helped launch an Iranian satellite into space in August. Russian and Iranian military also conducted joint drone exercises last month, with the Islamic republic hosting the endeavor.

“One can expect the relations between the two countries to expand in the upcoming years as the post-World War II international order implodes,” freelance writer Jose Nino wrote for Big League Politics.

Iran submits application to join BRICS group

Iran, reinforcing its plan to drop the U.S. dollar as a reserve currency, submitted an application to join the BRICS group of emerging economies. Argentina has also expressed intent to be part of the group that is made up of Brazil, Russia, India, China and South Africa.

Saeed Khatibzadeh, spokesman for the Iranian Ministry of Foreign Affairs, said Tehran joining BRICS “would result in added value for both sides.” He added that the Islamic republic has already had a series of consultations with the group about its application. Khatibzadeh lauded BRICS for its “very creative mechanism with broad aspects.” (Related: Argentina, Iran apply to join BRICS group of emerging economies.)

Maria Zakharova, spokeswoman for the Russian Ministry of Foreign Affairs, confirmed that both Tehran and Buenos Aires turned in their applications to join BRICS. “While the White House was thinking about what else to shut down in the world, ban or spoil, Argentina and Iran applied to join BRICS,” she wrote in a Telegram post.

Russian Foreign Minister Sergey Lavrov welcomed the two countries’ applications. “Of course, both Argentina and Iran are worthy and respected candidates, as well as a number of other countries that are also mentioned in the discussions,” he told TASS during an official trip to Turkmenistan.

“The most important thing is that the preliminary process has stated,” Lavrov continued.

According to Russian President Vladimir Putin, BRICS member countries are currently working to set up a new global reserve currency. Currencies of the member nations – the Brazilian real, the Russian ruble, the Indian rupee, the Chinese yuan and the South African rand – will make up this basket. If Argentina and Iran are accepted, their currencies – the Iranian rial and the Argentinian peso – will be added into this reserve basket that will topple the dollar’s domination.

Watch this World Is One News report about Iran’s plan to supply Russia with combat drones.

This video is from the High Hopes channel on Brighteon.com.