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23 April 2019 - 10:57
Iran, Turkey eye new financial mechanism

Iran and Turkey are now taking steps to bring economic and political convergence closer in face of the United States’ economic war.

The two countries are planning to implement a specific financial mechanism. The launch of this foreign trade mechanism between the two countries, similar to Instrument in Support of Trade Exchanges (Instax), for exchanges between them, can help develop cooperation between Tehran and Ankara, regardless of the sanctions issue in a standardized space. 

Iran and Turkey, with a goal of hitting $30 billion in economic relations, have widespread trade relations which makes the materialization of the goal quite affordable given the oil and gas transactions between two states.

Although the volume of economic relations between the two countries is now much lower than the expected figure, the two sides are determination to develop relations and achieve this goal.

It must be admitted that the level of economic interaction and trade between Iran and Turkey in comparison to the existing capacity demands more efforts and activities than ever before, and the two countries in addition to cultural and historical commonalities are the member states of regional organizations such as ECO, D-8 and OIC; a fact that, by exploiting the capacities of the two countries, helps strengthen the relations between Iran and Turkey.

After a meeting with Swiss and Turkish ambassadors, the head of Central Bank of Iran (CBI) Abdol Naser Hemmati wrote last week in his Instagram page about the visits: “The Swiss ambassador emphasized his country's willingness to open a bank channel between the two countries. I told him that launching a banking channel between the two countries for the development between the two countries after several years of interruption is under our support and we must expand trade and monetary cooperation based on the interests of the two countries without regard to US pressure.'


He added that during the meeting with the Turkish ambassador, he referred to dissatisfaction of Iranian banks towards Turkish banking cooperation and called for called for facilitating the bilateral relations between the two countries on the basis of the agreement between the two presidents.

The CBI chieff highlighted that Iran and Turkey have a target of $30 billion of trade on their agenda, which requires the facilitating of banking and financial operation and monetary relations between the two countries. 

The foreign ministers of the two countries, during the visit of Iran's Foreign Minister Mohammd Javad Zarif’ visit to Ankara, announced that their intention is to launch a trading mechanism similar to Instax, bilateral trade and business activities without the need for US dollar and to achieve sustainable development in economic relations between the two countries. 

The Iranian Foreign Minister, in an interview with journalists in Turkey, announced the agreement on banking cooperation and the establishment of a mechanism similar to that of Instax in bilateral relations with the country's officials.

'The Turkish Foreign Minister was supposed to pursue these issues specifically, of course the officials of the joint commission will continue to do their part,' said Zarif. 

The foreign minister underlined that Turkey is keen on serious regional and international economic, political, security cooperation with the Islamic Republic of Iran. 

Iranian FM expressed his satisfaction on having similar relationships with other neighbors, including Azerbaijan, Iraq, Afghanistan, Pakistan and other neighbors with whom Iran has very privileged relationships.

Turkey's foreign minister also said at a joint meeting with his Iranian counterpart, Mohammad Javad Zarif, that his country is pursuing a new trading mechanism such as Instax with Iran to counter US sanctions. 

Mouloud Chavosh Oglu emphasized Turkey's opposition to US sanctions, saying that Ankara and Iran needed to continue to increase bilateral trade with a target of $ 30 billion, three times more the volume of their current trade. 

Turkish Foreign Minister added that given the current mechanisms, Ankara is examining the creation of new mechanisms, such as Instax, and the removal of future trade barriers.

France, Germany and Britain have recently launched a trading mechanism called Instax, according to which trade between Iran and European countries will continue without using the US dollar. 

Considering the good capacities that exist between Iran and Turkey, the level of cooperation is expected to increase, and the two countries' economic activists are working to invest and joint production and export to the countries of the region. 

Although it should admit that Iran and Turkey have a lot of industrial, commercial and economic capacities left largely intact, efforts should be made to make potential capacities between the two countries more practical and financial mechanisms can also be effective.

News Code 190201

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