What do Russia, Iran, and Turkey have in common? They have suffered massive economic sanctions imposed by the United States. Recently, Russian foreign minister Sergei Lavrov said the US dollar was a lever of pressure that the United States used whenever it wanted to bully or punish other nations. Now Russia, Turkey, and Iran are planning to do something about it. They are working out a roadmap to ditch US dollar in trade between them.
Why do they want to ditch US dollar?
According to the Tehran Times, Iranian central bank governor Abdolnaser Hemmati discussed a replacement of the US dollar by national currencies in trade transactions with Russia and Turkey. The move is aimed at reducing the dollar’s influence on the trade and economies of these countries. Iran, Turkey, and Russia have agreed to ditch US dollar and use their national currencies in trade with one another.
Last Friday, Turkish President Recep Tayyip Erdogan and Russian President Vladimir Putin visited Tehran with their respective delegations for a trilateral summit of the Syrian ceasefire guarantor states. Though the summit focused mostly on Syria, the three nations also discussed a variety of other subjects such as oil and gas prices, expansion of banking relations, and the development of economic relations.
Abdolnaser Hemmati told media that commercial transactions among the three participating countries would be conducted using specific exchange rates. Hemmati plans to meet the central bank directors of Russia and Turkey soon to finalize the agreement and enforce it.
Russia, Turkey, Iran have suffered a lot
The Turkish lira has plunged dramatically against the US dollar in the last few months. Turkish President Recep Tayyip Erdogan has rejected the notion that lira’s decline was due to the weakening economic fundamentals. He has described it as a “currency plot” and has vowed to fully ditch US dollar in Turkey’s trade with partner nations. The country has also started using gold as an alternative to the US dollar.
Recently, Erdogan urged to “gradually end the monopoly of the dollar once and for all by using local and national currency among us.” He has also asked people to boycott the US products, which encouraged thousands of people to smash their iPhones. US President Donald Trump has doubled tariffs on aluminum and steel imports from Turkey.
Trump has imposed a variety of sanctions on the country over the detention of the American pastor Andrew Brunson, who has been behind bars in Turkey for almost two years. The US has also blocked Turkey’s access to the F-35 stealth fighter jet. Washington claims Brunson is innocent, but the Turkish government has accused him of being involved in a failed coup attempt to overthrow the Erdogan government in 2016
Russia has been facing a wide range of economic sanctions imposed by the United States for years. Though Russia has been accused of meddling into the US Presidential elections, the Trump administration has so far been reluctant to drop the Russian sanctions. Moscow was among the first to come up with a plan to ditch US dollar. It favors local currencies in trade with countries such as China.
Iran has also launched a verbal attack on the United States after Washington unilaterally withdrew from the 2015 nuclear agreement. The 2015 treaty removed all sanctions in exchange for Iran agreeing not to build nuclear weapons. Now that the Trump administration has withdrawn from the agreement, the sanctions will come into effect this November.
On Friday, soon after the meeting between Vladimir Putin, Recep Tayyip Erdogan, and Iranian President Hassan Rouhani in Tehran, Russia requested an extraordinary session of the United Nations Security Council on the results of the latest summit of the Syrian ceasefire guarantor states. During the summit, leaders from the three countries discussed the peace settlement process in Syria and the situation in Idlib.
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