Iranian Vice President for Economic Affairs Mohsen Rezaee put forward the possibility during a March 6 conference that touched on scientific and economic cooperation between the Islamic republic and West Africa. Highlighting the importance of multilateral cooperation, he remarked that Tehran could give a boost to many advanced industries in West Africa.
Rezaee even went as far as suggesting the creation of a joint bank, adding that settlements in local currencies would facilitate trade.
"In this situation, we would be able to conduct commercial deals between the [West African] countries … without the necessity of [using] dollars and euros," the Iranian vice president said. "All sides would benefit from it."
Rezaee noted how African nations have managed to achieve independence after centuries of colonization under various Western powers. He reiterated that in order to regain their international status, countries in Africa now need to build strong economies.
Rezaee's remarks followed Iranian President Ebrahim Raisi earlier telling a group of African officials that Tehran was willing to share technological achievements and facilitate the engagement of private companies in various projects in the continent.
According to recent data from the Islamic Republic of Iran's Customs Administration, trade between the country and other nations in Africa reached $992.77 million from March to October 2022. Exports from the Islamic Republic comprised a bulk of that amount – just over $933 million worth of goods – during the aforementioned period.
The news of Iran eschewing the U.S. dollar over local currencies for trading purposes followed proposals by India and Sri Lanka to adopt the Indian rupee for trade settlements. (Related: India, Sri Lanka moving toward using Indian rupee for international transactions (while ditching the dollar.))
According to a report by Russia Today (RT), officials of the two South Asian countries expounded on the benefits of using the rupee over the dollar – given that both New Delhi and Colombo look to strengthen their partnership through trade and investments.
"Rupee settlements are expected to derive benefits like shorter timelines, lower exchange costs and easier availability of trade credits for participating financial institutions," the RT report stated. "The initiative may also have a beneficial impact on the nations' respective tourism and hospitality industries."
The Press Trust of India (PTI) reported that the High Commission of India arranged a discussion on the matter in the Sri Lankan Capital.
Citing a statement by the high commission, the PTI said representatives from the Commercial Bank of Ceylon and two public sector banks – the State Bank of India and the Indian Bank – shared their experiences during the meeting. All three bank representatives also informed audience members that "they had started carrying out [Indian rupee]-dominated trade transactions … after the creation of [an] enabling framework] by the Reserve Bank of India and the Central Bank of Sri Lanka (CBSL) in 2022.
India's High Commissioner to Sri Lanka Gopal Baglay lauded the shift to the rupee, saying that it boosts "the two countries' joint efforts in building a stronger and closer economic partnership through trade and investment-led measures." CBSL Governor Nandalal Weerasinghe also praised the move, noting that business communities in India and Sri Lanka are supporting it.
DollarDemise.com has more stories about countries replacing the U.S. dollar as trade currency.
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