TEHRAN – Russia’s VTB Bank, the country’s second-largest bank, has opened a representative office in Tehran, as the two countries step up their financial cooperation in the face of Western sanctions.

According to the head of Iran’s Trade Promotion Organization (TPO) Alireza Peyman-Pak, this is the first Russian bank that has entered Iran and the presence of this bank could have a significant positive impact on the two countries' financial exchanges.

Iran and Russia have been boosting their economic ties as the two sanctioned nations take new steps for expanding cooperation in the energy sector and increasing settlements in national currencies.

In early February, Russian Deputy Foreign Minister Andrey Rudenko told Interfax that the two countries are actively cooperating in banking and are planning to ramp up the share of national currencies in mutual settlements.

"We are continuing to work with Iran while promoting trade transactions in national currencies. The share of such settlements exceeded 60 percent in 2021. The positive trend continued last year," Rudenko said in an interview with Interfax.

Also in late January, Vyacheslav Volodin, the speaker of Russia’s State Duma, said that the share of the ruble and the rial in mutual settlements between Iran and Russia exceeds 60 percent.

As reported by Russia Today, making the remarks in a government meeting, Volodin said, “It is important to use settlements in national currencies more actively. Much has already been done in this regard – now the share of the ruble and the rial in mutual settlements exceeds 60 percent. The work on the joint application of national payment systems is being completed. This will minimize the impact of sanctions, but also, of course, address issues related to mutually beneficial cooperation.”

According to Volodin, both countries should now focus on boosting the efficiency of mutual cooperation in the financial and banking sectors, in particular, by increasing the use of national currencies in their trade exchanges, using the Russian ‘Mir’ and Iranian ‘Shetab’ payment systems.

The Russian official further announced that trade between Iran and Russia surged by 15 percent in 2022, reaching $4.6 billion.

Volodin noted that the two countries are actively taking steps to build up mutual trade, saying: “extremely important in the conditions of sanctions pressure on our countries.”

EF/MA