Russia, Iran, Establish Direct Banking Arrangements Without SWIFT

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Iran-EAEU trade has been growing at rates in excess of 70% per annum  

Russia’s second largest bank, VTB, has launched a new service allowing individuals and businesses to transfer money to and from Russia and Iran, the lender announced on Monday (December 19).

State-owned VTB, which has been subject to sweeping Western sanctions since late February, has thus become the first lender to provide banking services to Iran, a country that has been under its own international sanctions for decades.

VTB’s vice president, Denis Valvachyov, believes that such transactions will be in high demand and that the move will strengthen economic cooperation and boost tourism between the two countries.

The bilateral trade volumes are there and increasing. Iran’s Financial Tribune reported in mid-November this year that trade between Russia and Iran in the January-October period surpassed that of full-year 2021, totalling US$4 billion, citing figures provided by the Federal Customs Service (FCS) of Russia. That implies about a 20% increase in overall bilateral trade between the two countries.

Russian exports to Iran increased by 27%, while imports rose 10%,

The new service will allow money to be sent between Russia and Iran using account details within a day. Next year, VTB is planning to expand transaction services with Russia’s ‘friendly’ nations, a classification describing those that have not imposed sanctions on Russia. Payments are currently available to the bank’s clients in more than ten former CIS states and some Asian countries.

Iran’s Integrated Forex Market already launched the Ruble/Rial currency pair in its trades from July this year. Iran needs to conclude bilateral and multilateral monetary agreements with the countries in the region, especially with neighboring countries, and Russia was the first country to do so. A currency pair is the quotation of two different currencies, with the value of one currency being quoted against the other. The first listed currency of a currency pair is called the base currency (Ruble), and the second currency is called the quote currency (Rial).

Iran has a Free Trade Agreement with the Eurasian Economic Union (EAEU), which includes Armenia, Belarus, Kazakhstan and Kyrgyzstan as well as Russia, and these countries can be expected to follow Russia’s currency lead. Iran-EAEU trade 2022 is on track to hit US$5 billion in the twelve months January-December 2021 and has been growing at rates in excess of 70% per annum.

Non-sanctioned Russian businesses wishing to establish bank accounts and operations in Asia, including Iran, may contact Maria Kotova at for guidance.

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