Turkey proposes to trade in local cash with Iran, others

Turkey has proposed to establish a mechanism to trade in local currencies with Iran as well as China and Russia.

Turkish President Recep Tayyip Erdogan was quoted by media as saying that he had already proposed Russian President Vladimir Putin to conduct trade between the two countries with local currencies.

“I proposed Putin the following: Let’s do our trade in local currencies. Whatever I buy [from you] I shall pay you in Russian ruble, and whatever you buy from me make the payment in Turkish liras,” Turkey’s Hurriyet newspaper quoted Erdogan as saying.

He added that he had made the same offer to China and Iran and his offer was found reasonable.

“We have given the necessary instructions to our central banks and we will try to conduct such [trade] relationships between us through this way,” Erdogan said.

The Turkish president said last April that Tehran and Ankara had decided to double the volume of bilateral trade while phasing out the US dollar as the dominant currency for their transactions.

"I believe there is some trouble with transferring funds due to the sanctions [imposed on Iran]," Erdogan was quoted by the Turkish media as saying at the time.

“We … want bilateral trade to be conducted in local currencies. Iranian Central Bank officials and our Halk Bank chairman will discuss the matter."

Iran is yet to react to Turkey’s proposal. The country has nevertheless already started talks with Russia to ditch the dollar and trade in their own currencies.

Russian Industry and Trade Minister Denis Manturov said last December that Moscow was working on a plan to switch to national currencies in mutual trade with Iran. Manturov added that the policy was based on an expected surge in trade between Iran and Russia.

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