Central banks of Iran and Iraq finalized an agreement to establish a bilateral payment mechanism to ease trade and the flow of money between the two neighboring countries.
Governor of the Central Bank of Iran Abdolnasser Hemmati and Governor of the Central Bank of Iraq Ali Mohsen Al-Allaq met on Tuesday in Baghdad where they signed an agreement on a payment mechanism which is to facilitate the settlement of Baghdad’s debts to Tehran.
The deal mainly focuses on a payment channel that is to facilitate the settlement of the Arab country’s debts to Tehran over gas and electricity imports, inter alia.
The two sides inked the agreement following negotiations between members of their delegations in Baghdad’s Al Rasheed Hotel.
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Upon arrival in the Iraqi capital on Tuesday, Hemmati said that his trip was aimed at removing the obstacles that hinder the settlement of Iraq’s debts to Iranian exporters.
“Currently, we’re witnessing a considerable volume of exports (from Iran to Iraq) in both public and private sectors, but there are shortcomings in banking and monetary exchanges, which have created problems for (Iranian) exporters,” he said.
Following Washington reinstated its unilateral sanctions on Tehran, Iran is establishing different bilateral and multilateral financial channels with its major trade partners in the world to bypass the pressures posed by the US.
Earlier on January 01, Hemmati met with India’s Ambassador Saurabh Kumar, in a farewell meeting at the end of the envoy’s mission in Tehran.
In the meeting, Hemmati and Kumar discussed banking relations between the two countries, and announced that the rupee payment mechanism between the 2 countries will become operational within days.
India’s ambassador to Iran said that the financial mechanism between the two countries is prepared and the two sides will carry out their business and banking operations in the coming days on the basis of the exemptions received by the Indian government.
Also in the meeting, the two sides discussed facilitating banking affairs and the implementation of India's investment in Southeastern Iranian port of Chabahar.
Kumar confirmed that the two countries’ banking mechanism has been created earlier, as both sides will do business in coming days, and added that Iran’s oil revenues are exempted from taxes which are commonly imposed on foreign accounts in Indian banks.
Also the European Union has established a payment mechanism between the member states of the bloc and Iran.
