Russian banks begin accepting Iranian LCs to boost bilateral trade
3 Min Read
Two Russian banks have started accepting letters of credit issued by Iranian banks, in a move aimed at facilitating Iran-Russia trade and easing imports of essential goods amid Western sanctions.
-
People wait to exchange currency near a sign advertising currency exchange rates at an exchange office in Moscow, Russia, on December 16, 2014 (AP)
Two Russian banks have agreed to accept letters of credit (LCs) issued by Iranian banks, marking a significant step forward in deepening economic and financial ties between Tehran and Moscow, Press TV reported on Sunday.
According to Alireza Gachpazzadeh, deputy governor for foreign exchange operations at the Central Bank of Iran, the move is expected to enhance Iran’s capacity to import basic goods, particularly agricultural staples, from Russia.
Gachpazzadeh noted that the new arrangement enables Iranian traders to settle payments through Russian banks using domestically issued LCs, a development that will significantly reduce costs and logistical barriers for Iranian importers.
The initiative is especially critical for securing food and essential goods, as Iran continues to navigate supply chain disruptions and Western-imposed sanctions. Gachpazzadeh also revealed that a third Russian bank is likely to join the system soon and begin processing Iranian LCs.
Iran-Russia banking ties deepen
The decision is part of a broader effort by Iran and Russia to expand trade and financial cooperation, bypassing Western-dominated financial channels.
Earlier this year, VTB, Russia’s second-largest bank, announced the upgrade of its Tehran office to a full branch, becoming the first Russian bank to establish a branch on Iranian soil.
Progress has also been made in the area of cross-border payments. In May, it was announced that Russian citizens can now use Mir payment system cards for transactions within Iran. Likewise, Iranian citizens can withdraw rubles in Russia using cards linked to Iran’s Shetab integrated payment system.
The deepening financial infrastructure between the two countries reflects a strategic alignment aimed at reinforcing economic sovereignty and boosting Iran-Russia trade amid ongoing geopolitical challenges.
On a related note, Iran's Supreme National Security Council Secretary Ali Larijani met with Russian President Vladimir Putin in Moscow, delivering a letter on behalf of the Leader of Iran's Islamic Revolution and the Islamic Republic, Sayyed Ali Khamenei.
Earlier on Thursday, Larijani had traveled to Russia to hold bilateral talks and discuss international issues, as announced by the secretariat of Iran's Supreme National Security Council. Bilateral relations and enhanced cooperation in the economic, regional, and international arenas were the key topics of discussion between Larijani and Putin, Russian news agencies reported.
Read next: Iran-China-Russia alliance to counter EU snapback move: Tehran
