Tehran (CBI PR dept.) - The governors of the central banks of Iran and Turkey officially announced the finalisation of an agreement on bilateral Lira-Rial exchange.

During a visit paid by Ishagh Jahangiri, the first Iranian vice-president to Ankara and his bilateral negotiations with the Turkish prime minister, Valiollah Seif and Murat Çetinkaya signed the final agreement on Lira-Rial
swap. The draft of the agreement had been approved by both governors a week before.
Based on the agreement, the two sides allocate TRY 5bn (and its Rial equivalent) credit to the agent banks of the respective countries to be used for opening documentary credits in favour of the businessmen with one-year maturity.
The agreement aims at facilitation of bilateral trade based on employment of local currencies for trade finance and direct investments. The Iranian Rial and Turkish Lira will be easily convertible to each other leading to a reduction of costs for conversion and transfer of currencies. In other words, the agent banks of both countries can use international payment instruments in local currencies to finance the bilateral trade.
The interconnection of the national payment switches of Iran and Turkey was another item on the agenda. It was arranged that the IT departments of the two central banks hold a meeting in the next couple of weeks to study the technical infrastructure and the required mechanisms to fulfill this objective. Upon finalisation, the Iranian and Turkish citizens will be provided with common e-banking services.
Moreover, it was agreed that Bank Melli Iran and Ziraat Bank from Turkey sign an MOU regarding how to use the credit line in local currencies. This MOU will pave the way for enhancement of Iran-Turkey trade.
It should be reminded that the preliminary arrangements for promotion of economic and trade relations between Iran and Turkey had been made during the visit paid by the Turkish President to Iran.