The EU and the US led embargo on Russia has the potential to affect the country’s economy adversely particularly after Saudi led meet of oil producing countries decided not to alter the present situation related to oil pricing and drilling.
In view of this, Russia has started taking long term measures; this includes an attempt to commence trade in national countries with friendly countries.
One such country is Iran with whom Russia plans to commence trade in national currencies shortly. Russian Economy Minister Alexei Ulyukayev recently announced that the central banks of Russia and Iran are working on ways to start making payments in the two countries’ national currencies and preparatory work has already begun to achieve this goal.
“Mechanisms of using national currencies in mutual relations [between Russia and Iran]…that involve lending in national currencies and using contracts in national currencies should be established,” Ulyukayev said.
Ulyukayev stated that Russia’s Ministry of Economic Development supports the idea of mutual payments in national currencies, but the two countries have not held discussions about time frames yet.
Russia is entering a deal with Iran to provide the later with grain and industrial products in return for oil. A whole list of goods is being prepared which may be exchanged by the two countries.
Both Russia and Iran are facing sanctions for various reasons. Russia has in the near past started making overtures towards Pakistan as well in the face of India cozying up with the US. Russia has a good amount of trade with China as well.