According to Press TV, the Deputy Governor for Foreign Exchange Operations of the Central Bank of Iran announced on Sunday that two Russian banks have agreed to accept Iranian-issued LCs to help promote trade between Iran and Russia.
Alireza Gachapazadeh said the new agreement will strengthen Iran’s ability to import essential goods from Russia, especially agricultural products.
Gachapazadeh said a third Russian bank may follow suit and start processing LCs issued by Iranian banks in the near future.
An LC is a document issued by a bank that guarantees payment from a buyer to a seller. Russia’s decision to accept LCs issued by Iranian banks will significantly reduce import costs for Iranian companies.
The move comes as Iran and Russia expand economic and trade cooperation as they seek to ease the burden of Western sanctions on their economies.
Tehran and Moscow have also expanded banking ties in recent years as part of efforts to accommodate growing bilateral trade.
VTB, Russia’s second-largest bank, announced in January that it would upgrade its representative office in Tehran to a branch, making it the first Russian bank to open a branch on Iranian territory.
In May, it was announced that Russian citizens with bank cards connected to the national payment system, known as Mir, could now use the cards to make payments within Iran.
Iranian citizens can also withdraw rubles from Russian cash machines using cards connected to Iran’s Shetab integrated payment system.
MNA