On Sunday, top officials from the Central Bank of Iran and Turkey had a meeting in Tehran. Along with senior bankers, they had a high level talks to discover a new way of developing banking relations. One of the measures of the central banks of both countries is the currency swap agreement, which recently signed between Iran and Turkey.
This agreement is a very appropriate way to continue and increase cooperation. It is expected after the infrastructures are set in place, the implement procedure will be commenced as soon as possible. After rounds of negotiation, the officials of two countries’ central banks finally agreed on conducting bilateral trade in local currencies. Regarding to the agreement, both parties allocated a credit of 5 billion Lira and its equivalent in Rial to their agent banks. Bank Melli Iran and Ziraat Bank are the respective agent banks which such credit allocated to them. Both countries’ traders can use this credit as letters of credit with a repayment period of one year.
Based on this agreement, the payment tools such as letters of credit and remittances will be issue in the local currency. The traders will no longer need to use intermediate currencies. By such method the costs for both countries’ traders will reduce.
The future goal between two countries is connecting their bank cards. This movement allows their citizens to benefit from mutual electronic banking services and facilitate tourism.
Development of Strategic Relations
Referring to the longstanding history of trade between two countries, the expansion of the ties is very important. The implementation of the currency swap agreement is a step toward such aim. The CEO and other top-level executives of Ziraat Bank and Halkbank participated in the meeting. In addition to stating their opinion about the currency swap agreement, they expressed their willingness to improve the correspondent banking relations with their counterparts.