Iran, Russia ditch dollar; Turkey also on board

Iran and Russia have ditched the dollar and are now carrying out all their transactions in national currencies, Iran’s Central Bank Governor Abdolnaser Hemmati says.

“Now all of our financial transactions with Russia are through the national currency of the two countries. About 30% to 50% of the trade with Turkey is also done with the national currency and the rest with the euro,” he told reporters in Tehran after a cabinet meeting.

“This trend is gradually removing the dollar from the trading cycle, with many countries now willing to trade in their national currency so that the US does not oversee their trade,” Hemmati added.

On Friday, the United States imposed another round of sanctions on Iran’s central bank, but analysts cast doubt on their effectiveness because Iranian banks are already cut off from the American financial system.

The sanctions, championed by former national security adviser John Bolton who was ousted this month, are part of the US “maximum pressure” campaign to force Tehran over its nuclear program and influential regional role.

Hemmati said the fresh sanctions were a “psychological” attempt, which would not change anything.

“The fact is that we have serious problems in terms of banking, but we have found other ways to do our work,” he said.

“I think the renewed sanctioning of the central bank is aimed at creating a psychological atmosphere. Nothing new will happen and we are doing our job,” Hemmati added. “If they sanction us four more times, it will have no new effect.”

In the future, Iran will establish business, financial, and banking relationships using methods other than those considered the United States, the governor said without elaboration.

Across the world, a campaign is gaining momentum to break the dollar’s hegemony.

Russia, which is subject to US sanctions, has tried to sell oil in euros and China’s yuan. Venezuela and Iran, which are also under US sanctions, sell most of their oil in other currencies.

Ditching the dollar would undermine its status as the world’s main reserve currency, reduce Washington’s clout in global trade and weaken its ability to enforce sanctions on nation states.

Earlier this month, Russian broadcaster RT said Moscow plans to issue its first yuan-denominated bond as the country is working with China to cut reliance on the US greenback.

Beijing and Moscow have been planning yuan bonds since 2016, but the plan has been postponed several times. According to RT, Russia now expects to issues its first sovereign debt in the Chinese currency, officially called renminbi, by the end of the year or early next year.

SS