Valiollah Seif and Murad Chutin Kaya, Iranian and Turkish central banks' governors, signed the final document concerning bilateral swap of riyal and lira, during Es’hagh Jahangiri's trip to Ankara and his negotiations with Turkey's Prime Minister.
The document's draft had been approved during the last week meeting between Iran and Turkey's central banks' governors.
Based on this agreement, Iran will fund 5 bn-lira in Turkish operating banks and Turkey will fund the equivalent amount in Iranian operating banks to open letters of credit (LC) for two sides' merchants with due within one year. The agreement facilitates trade between Iran and Turkey for "trade funding" and "direct investing" by using two countries' local currencies. Hence Iran's riyal and Turkey's lira are converted into each country's money easily, leading to decrease the cost of changing and transferring money for two sides' businesspeople without need for any inter-currency.
In other words, Iran and Turkey's operating banks use international payment instruments such as LCs and documentary drafts for funding trade in local currencies.
Also, the connection of Iran and Turkey's national switch was discussed and a meeting is going to be held by the next two weeks between two countries' central banks' IT sectors to consider its technical infrastructures and predict the required ways. If the matter is realized, Iranian and Turkish citizens can use common electronic banking services.
Regarding Iranian First Vice-President's travel to Turkey, Iran's Bank Melli and Turkey's Zirrat Bank are supposed to ink an agreement with regard to banking arrangements and payments to establish a credit line for using local currencies between each other. The agreement will fortify Iran-Turkey's trade.
It is worth noting that during Turkish President's travel to Iran two weeks ago in order to pave the path to expand Iran and Turkey's economic relations, the preliminaries of banking relations development between two countries had been approved.
