Iran’s financial system has intensified its efforts to establish ties with a number of countries based on the national currencies, as the U.S. sanctions against the country have complicated transactions in dollars.

In this line, Iran made an agreement in last October with Turkey on using local currencies in trade transactions between the two countries to improve economic ties and make bilateral trade easier.

Under the agreement signed between the central banks of the two neighboring countries, the Iranian rial and Turkish lira will be easily converted.

And on April 16, Bank Melli Iran (BMI) opened the first letter of credit (LC) for business transactions with Turkey in the national currencies in a move to omit dollar and euro in bilateral trade.

Following the LC opening, Gholamreza Panahi, a board member of the BMI, said this method reduces risks and costs significantly and will definitely facilitate trade ties between the two countries; so it could be a proper model for the expansion of business and trade transactions with other countries.

Also, in an exclusive interview with Anadolu Agency in Moscow in last October when the agreement was signed between Iranian and Turkish central banks, Mohammad-Hossein Adeli, the secretary general of the Gas Exporting Countries Forum (GECF), said that Iran and Turkey’s decision to trade in national currency is technically feasible particularly for bilateral energy trade.

"If sanctions, restrictions and political considerations are somehow limiting the countries' free trade, they will start having more willingness to do it [trade in national currencies]," he noted.

The official asserted that this practice will have a knock-on effect on other countries and they will see that it is not just possible but profitable.

And the Central Bank of Iran (CBI) has said that it has signing other deals for trade in local currencies with the countries which have major transactions with Iran on its agenda.

Meanwhile, on April 9, CBI Governor Valiollah Seif said that the Supreme Leader Ayatollah Ali Khamenei had welcomed his suggestion to replace dollar with euro in Iran’s foreign trade.

“Dollar does not play a role in our foreign trade transactions,” Seif announced at the time.

The shift to trade in national currencies is something also desired by other countries which have major trade transactions with Iran, such as Russia and India.

On April 9, Russian Energy Minister Alexander Novak said Russia was considering payments in national currencies in trade with Iran.

“There is a common understanding that we need to move towards the use of national currencies in our settlements. There is a need for this, as well as the wish of the parties,” RT quoted Novak as saying.

“We are considering an option of payment in national currencies. This requires certain adjustments in the financial, economic and banking sectors”, the minister explained.

Also in mid-February, the Indian media reported that India has allowed its investors to invest in Iran in rupees to stimulate trade and investment between the two countries.

While ditching dollar in its international trade transactions, Iran is also deleting the U.S. currency from its domestic financial system as the cabinet on Wednesday ordered all state-run organizations and companies to replace U.S. dollar with euro in reporting their financial statements.