Rejection of Petrodollar continues as Iran and Turkey agree to bypass dollar and use own local currencies

China and Russia’s model of bi-lateral currency settlement is gaining more steam as two more nations have come to an agreement to bypass the dollar for primary settlement and begin using their own local currencies in its stead.

On Oct. 10, the central banks of Iran and Turkey signed an agreement to use their own sovereign currencies in trade settlement and are looking to cut their dependence on the global reserve currency.

An agreement on using local currencies in trade has been inked between the central banks of Iran and Turkey. The aim is to improve economic links and make bilateral trade easier. 

Under the deal, the Iranian rial and Turkish lira will be easily converted to help reduce the costs of currency conversion and transfer for traders. 

Banks in the two countries will also be able to use international payment tools to convert currencies into rials and liras. 

The preliminary agreement was signed during last week’s visit of Turkish President Recep Tayyip Erdogan to Tehran. 

“We have made very important decisions to strengthen and expand economic relations, including the use of our national currencies in trade,” said Iranian President Hasan Rohani after meeting his Turkish counterpart. 

The leaders of the two countries have agreed to boost bilateral trade which currently stands at around $10 billion. – Russia Today

Both Iran and Turkey have created a strong partnership when it comes to negotiating around the Petrodollar as they were intrinsically linked to the Oil for Gold trade during the time the U.S. imposed decade long sanctions on the Middle Eastern economy.  And with Turkey moving more and more into Russia’s camp following the failed coup against Erdogan a few years ago, the trend is continuing more and more towards economies bypassing the dollar for their own local currencies.
Source: The Daily Economist