Bank of Russia Governor Elvira Nabiullina held talks with her Iranian counterpart during a visit to Tehran, a rare foreign outing since she was sanctioned over Moscow’s invasion of Ukraine.
(Bloomberg) — Bank of Russia Governor Elvira Nabiullina held talks with her Iranian counterpart during a visit to Tehran, a rare foreign outing since she was sanctioned over Moscow’s invasion of Ukraine.
The discussions included a focus on strengthening relations between commercial banks from the two countries as well as “increasing banking infrastructure cooperation,” Iranian central bank Governor Mohammad-Reza Farzin said, the state-run IRNA news service reported.
Nabiullina also held talks on the sidelines of an Asian Clearing Union meeting in Tehran, which Russia is attending as an observer along with officials from Belarus and Afghanistan, Iran’s semi-official Tasnim news service reported Wednesday. Iranian First Vice President Mohammad Mokhber told her that Iran was determined to sideline the dollar in transactions with Russia, it said.
Nabiullina, who wore a headscarf at the meetings, is the second high—ranking Russian to go to Tehran this month following the visit last week of Deputy Prime Minister Alexander Novak, President Vladimir Putin’s top energy official. Feted as one of the world’s best monetary policymakers before the February 2022 invasion, she is now shunned by counterparts in the US and Europe as she has worked to stabilize the ruble and manage the economic fallout from unprecedented international sanctions on Russia.
Governments have frozen some $300 billion of the Bank of Russia’s foreign reserves, while the US, Canada and the UK have sanctioned Nabiullina. As decades of Russian integration into the global financial system unraveled following the invasion, she sought to resign as governor only for Putin to reject the request and nominate her to a new five-year term.
What Bloomberg Economics says….
While growing in importance Iran-Russia bilateral trade is not yet large enough to affect either country’s macroeconomic fundamentals. Even after trade turnover almost reached $5 billion, it is hardly possible for gains from trade to make up for crude export revenues lost to sanctions. We expect developments in local currency trade settlement to favor Iran as Russia increases imports of goods and service.
-Alexander Isakov, Russia economist
Russia and Iran, which has been in economic isolation for decades, are fostering relations in an attempt to bolster trade and ease the pressure of sanctions. Putin and Iranian President Ebrahim Raisi held a videoconference last week for the signing of an agreement to build a railway line to boost transportation along a North-South corridor linking Russia to India through Iran.
Iran Has Lessons on Grim Survival for Russia Under Sanctions
Nabiullina’s visit follows an agreement reached in January between the Russian and Iranian central banks to improve financial and banking transactions between the two countries. State-owned VTB Bank PJSC, Russia’s second-largest lender, has since opened a representative office in Iran.
RUSSIA INSIGHT: Nabiullina’s Iran Trip Little More Than Symbolic
“Nabiullina, who until recently was held up as an example by the International Monetary Fund for her financial policy, hardly saw her career in this way – to travel to Iran,” said Andrei Kolesnikov, a senior fellow at the Carnegie Endowment for International Peace. “It’s another question of what it’s like for Western-oriented officials to work with Iran now.”
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