Iran's central bank chief, Mohammad Reza Farzin, is continuing to call for closer financial ties with Russia that would facilitate letter of credit (L/C) and other transactions between Iranian and Russian banks.

Speaking at a congress in St Petersburg organised by Russian monetary policymakers, Farzin is also urging BRICs countries to create their own independent entities to replace the Financial Action Task Force (FATF) and the SWIFT messaging platform.

Listening to Farzin at the Bank of Russia's Financial Congress was Russian central bank Governor Elvira Nabiullina, who invited the Iranian central banker to the forum.

Ongoing discussions

Farzin, who led a technical delegation to Moscow in December for discussions on expanding bilateral monetary and banking cooperation, said the Russian and Iranian financial systems should work more closely together.

Separately, but also in December, the two central bankers finalised an agreement to utilise their national currencies, the Iranian rial and the Russian rouble, in bilateral trade instead of the US dollar.

First L/C deal

In the same month, Iran's Bank Sepah initiated a EUR 17 million (US$19 million) L/C to secure payments for imports from Russia.

This marked Iran's first L/C conducted by its banking network abroad since the re-imposition of sanctions by Washington in May 2018, following Tehran's withdrawal from the 2015 nuclear deal.

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