The agreement between the central banks of Russia and Iran is another step in the process of de-dollarization of the world economy. By that deal, 52 Iranian banks will connect with 106 Russian banks. The use of the ruble and the rial exceeds 60% of trade between the two countries, which avoids Western sanctions and solves trade problems between the two.
The Central Banks of the two countries are working on the prospect of establishing a common currency for trade, replacing the US dollar. It would be a digital currency backed by gold.
With these mechanisms, Russia has become the largest investor in Iran, reaching 45% of the total foreign investment there. Russia invests in energy projects, railways, car manufacturing and agriculture.
All of this is integrated into the agreement established in September 2022 between Russian President Vladimir Putin and Chinese President Xi Jinping in Samarkand, betting on strengthening the multipolar world. Putin’s talks with Iranian President Ebrahim Raisi in Samarkand were on a common deep strategy between the two countries.
The plans of Russia and Iran are inserted in the framework of the “Eastern Axis”, which favors the regional states of Russia, China, India and Central Asia.
The global dimension of this trend is combined with the formation and strengthening of the Brics. In 2023 they will deepen the development of their mutual financial payment systems and their own reserve currency. There are at least 13 confirmed candidate countries to join the Brics, including Argentina, Iran, Saudi Arabia and Indonesia.
Brazil’s proposal for the creation of a common South American currency is moving in the same direction. That currency, which would be called Sur, would be used for trade between the countries of the region, starting with Argentina and Brazil. A South American central bank would be created that would rely on Brazilian reserves.
All this strengthens the international process of de-dollarization of international trade, weakening the economic hegemony of the United States at the world level. The fight for the creation of a multipolar world is parallel to the trend towards de-dollarization of world trade.
