Countries to switch international trade currencies and bypass USD
In a move to drop the US dollar from international trade, Iran and South Korea have agreed on a new cross-currency deal.
The new agreement is set to bolster relations between Seoul and Tehran, despite tough sanctions placed on the Iranian regime by the United States.
According to a report by Yonhap News Agency, the arrangement is of great significance to both countries, explaining that the understanding indicated Korea’s concerns about relations with Iran.
The move comes as a number of nations are also looking to bypass the dollar, and with it, US sanctions.
According to RT, the countries also agreed to make payments and settle their financial and banking accounts using the South Korean national currency, the won.
That will allow South Korean and Iranian companies to continue their extensive exchanges in various fields.
The volume of bilateral trade surpassed the $12-billion benchmark last year, according to Iran’s ambassador to Seoul Saeid Badamchi Shabestari, who told Press TV that the Iranian and Korean economies complement one another.
The fact that Tehran-Seoul relations had been founded on “reality” would keep the countries determined to deepen the ties in the face of America’s “hostile and illegal unilateral actions,” the ambassador said.
Earlier, South Korean Ambassador to Tehran Ryu Jeong-hyun said that despite many European companies leaving Iran under the pressure of US sanctions, South Korean firms understand the significance of the Iranian market and have chosen to stay.
In response to US sanctions, Iran and its trade partners have been negotiating the reduction of the US dollar’s share in mutual trade.
Russia, Turkey, India, Iraq, Qatar, China, and others have been actively Hyun steps to switch to national currencies in settlements in order to bypass Washington’s pressure.
Central banks across the globe have begun to turn their backs on the US dollar in favor of gold due to ‘geopolitical uncertainty’ allegedly caused by the US trade war with China.
The demand for gold soared 42 percent year on year in the first quarter, according to the World Gold Council (WGC) statistics.
Russia and Turkey are currently the most significant net buyers.
Central banks added a total of 193.3 tons of bullion in the half of 2018, an 8 percent increase from the 178.6 tons bought in the same period the previous year.
READ MORE: Gold Demand Soars 42% as Countries Begin Dumping US Dollar