Iran calls for the abandonment of the US dollar as Russia says 90% of financial transactions with China made with yuan and rubles
Iranian President Ebrahim Raisi has called for the US dollar to be abandoned in global trade to reduce reliance on the Western financial system.
Addressing a virtual summit of the Shanghai Cooperation Organization (SCO) via video link on Tuesday, the Iranian leader urged its members to put an end to the longstanding dominance of the greenback.
“The hegemony of the Western world has contributed to the hegemony of the dollar. It is necessary to remove this instrument of hegemony in the global practice and use national currencies for settlements between countries in order to create a new world order,” Raisi said.
Russian President Putin revealed at the summit that Russia-China trade and economic cooperation is expanding, with over 80% of settlements between the two nations currently made in rubles and yuan.
According to Putin, the volume of trade between Russia and fellow SCO member states reached a record $263 billion in 2022. The figure was up 35% in the first four months of this year, he noted. The share of the ruble in Russia’s settlements with the SCO countries exceeded 40%, Putin said.
Trade between Russia and China has continued to accelerate after hitting a historic high of $190.3 billion in annual terms in 2022. Exports and imports have surged at double-digit pace since the beginning of the year. According to customs data, bilateral trade soared to $93.8 billion in January-May, marking a 40.7% increase compared with a year ago. Russian Finance Minister Anton Siluanov recently said that bilateral trade is on track to surpass the target of $200 billion a year earlier than anticipated.
Economic ties have been bolstered by the mutual decision to conduct the majority of transactions in national currencies instead of the US dollar.
Newly SCO member Iran wants to expand cooperation with Russia in building new transport routes in the Islamic Republic, Raisi added.
In May, Russian President Vladimir Putin and his Iranian counterpart signed an agreement for the construction of a railway between the Iranian cities of Rasht and Astara.
The railroad linking the two cities is part of the International North South Transport Corridor (INSTC), a 7,200km multi-mode transit system that connects ship, rail and road routes for moving cargo between India, Iran, Azerbaijan, Russia, Central Asia, and Europe.
The Iranian president also emphasized that membership of the SCO would help boost economic development in his country.
Iran became a full member of the SCO during the current summit of the organization, which was chaired by Indian Prime Minister Narendra Modi.
The organization was founded in 2001 as an economic and security bloc by the presidents of Russia, China, the Kyrgyz Republic, Kazakhstan, Tajikistan, and Uzbekistan. India and Pakistan became permanent members in 2017.
Iran is gradually emerging from diplomatic isolation and is strengthening ties with its key allies. Over the past year, Moscow and Tehran have significantly bolstered economic cooperation in the face of Western economic sanctions. Bilateral trade turnover has nearly tripled from $1.6 billion in 2019, reaching $4.6 billion in 2022, according to official data.