Iran has approved a proposal by Russia to establish a bank for investments in joint economic projects, a deputy co-chair of the Russian-Iranian intergovernmental commission said on Wednesday.
The bank will initially focus on investment in bilateral trade and other joint economic projects.
“It [the establishment of the bank] could be done very soon, depending on technical issues and how they could be resolved,” Mehdi Mohtashemi told RIA Novosti.
“The initial capital will, probably, total $500 million. The capital could be increased when the cooperation in trade and joint projects grows,” added Mohtashemi.
Iran’s Ambassador to Russian Mehdi Sanaei said in late January that Tehran and Moscow are working on a plan to switch their bilateral trade to national currencies for which he said the two countries will create a joint bank or a mutual account.
“Both sides plan to create a joint bank, or joint account, so that payments may be made in rubles and rials and there is an agreement to create a working group [for this],” said Sanaei.
Also, Assadollah Asgaroladi, a veteran Iranian merchant and the chairman of Iran-Russia Joint Chamber of Commerce, said the bank could break the domination of Western currencies over bilateral exchanges and that it would eventually open a new chapter in trade relations between Tehran and Moscow.
Later in March, Iran and Russia signed a basic agreement to create a joint regulation body to oversee interbank financial transactions between the two countries.
The agreement – that was signed between the Iranian and Russian central banks – took both countries one step closer toward the establishment of the promised joint bank – which is believed to have been specifically designed to help dodge the effects of US-led sanctions on the two countries.