The agreement between Russia and Iran to trade in their respective national currencies rather than the U.S. dollar has been finalized, according to Iran’s state media.
Both nations are subject to sanctions imposed by the United States.
Iran announced in November that it will supply Russia with Su-35 fighter airplanes, Mi-28 attack helicopters, and Yak-130 pilot training aircraft, which has led to Moscow’s recent warming toward Tehran.
De-dollarization efforts have been ongoing on a global scale for years, with so-called pariah states and BRIC nations attempting to abandon the U.S. dollar for alternative currencies.
Putin declared in 2019 that it was time to reevaluate the dollar’s position in international trade.
Russia and China considered adopting the euro, the second most dominant currency in the world, an acceptable compromise at the time; their ultimate objective was to maintain the use of their respective currencies.
Earlier this year, dividends from the Sakhalin 1 and 2 oil ventures were paid in Chinese yuan rather than dollars. Russia was severed from the dollar-dominated global payment systems last year as a result of comprehensive sanctions imposed in response to the Ukraine conflict.
Russia has declared that it will begin accepting Chinese and Emirati currencies in lieu of the United States dollar as payment for its energy commodities.
Nevertheless, despite extensive international de-dollarization endeavors, the overwhelming majority of cross-border transactions involving BRICS members continue to be recorded in US dollars.
BRICS members frequently exchange their local currencies with one another and with currencies of other emergent markets through the utilization of the dollar as an intermediary.