Tehran, Baghdad Agree to Remove Payment Obstacles
Tehran, Baghdad Agree to Remove Payment Obstacles

TEHRAN – Iran and Iraq signed an agreement late Tuesday on a payment mechanism to remove the obstacles blocking the settlement of Baghdad’s debts to Tehran. IRAN NEWS NATIONAL DESK Signatories to the deal, which was inked in Baghdad, were Governor of the Central Bank of Iran (CBI) Abdolnasser Hemmati and his Iraqi counterpart Ali […]

TEHRAN – Iran and Iraq signed an agreement late Tuesday on a payment mechanism to remove the obstacles blocking the settlement of Baghdad’s debts to Tehran.

IRAN NEWS NATIONAL DESK

Signatories to the deal, which was inked in Baghdad, were Governor of the Central Bank of Iran (CBI) Abdolnasser Hemmati and his Iraqi counterpart Ali Mohsen Al-Allaq.

The deal focuses on a new mechanism on facilitating the repayment of Iraq’s electricity and gas dues to Iran and paving the way for the businesses of the two countries to conduct their mutual transactions. No further details about the mechanism are revealed yet.

Hemmati is also scheduled to hold talks with a number of senior political and economic officials in the Arab country, during his two-day stay.

Upon his arrival in Baghdad, the CBI governor said, “given the positive view of the both sides, I hope we will have good negotiations to advance the two countries’ interests.”

Pointing to the significance of the Iraqi market for Iranian traders, Hemmati stressed that the two sides will put all-out efforts to overcome shortcomings in financial transactions, which have created some hurdles for Iranian exporters.

Iraq is now the second top destination of Iran’s non-oil exports. According to the Islamic Republic of Iran Customs Administration, Iran exported goods worth over $7.5 billion to Iraq during the past 10 months of the current fiscal (through Jan. 20), indicating a 45% rise in comparison to the similar period of last year.

The source said Iraq’s due debts for Iran, worth $2 billion, are due to imports of electricity and gas as well as other goods over the past years.

Iraq has imported 1,000 megawatts of electricity from Iran for years to cope with energy shortages.

Meanwhile yesterday, Hemmati said that Iranian traders can open accounts with Iraqi banks to carry out their transactions under a new payment system agreed between the two neighbors.

“According to an agreement reached with the Central Bank of Iraq, Iranian exporters can operate through Iraqi banks, and in this regard, Iranian banks can have dinar-denominated accounts in Iraqi banks,” he said.

Hemmati met Iraqi bank directors, members of chambers of commerce and traders on Wednesday, saying the two sides had reached “good agreements.”

 

“According to the agreement, the Central Bank of Iran will have euro- and dinar-denominated accounts in Iraqi banks and gas and oil exchanges will be carried out via these accounts,” he said.

“Iraqi companies can also open accounts in Iranian banks and do trade in dinars,” said Hemmati who also announced that he agreed with a request for Iraqi banks to open branches in Iran.

“Therefore, with these agreements and the blessing of the Iraqi prime minister, banking relations between Iran and Iraq will be much stronger, and the expansion of trade relations between the two countries will take shape on this basis,” he added.