The trade deal that Turkey reached with Iran earlier this month offers the best chance yet to boost the use of the Turkish lira in foreign trade, an objective that Ankara has long pursued. The trade balance between the two neighbors paves the way for the use of the Turkish lira and the Iranian rial in commercial exchanges. Last year, Turkey’s exports to Iran amounted to $4.9 billion, while imports were worth $4.6 billion.

Following President Recep Tayyip Erdogan’s Oct. 4 visit to Tehran, the central banks of the two countries signed a swap agreement, which amounts to a mutual commitment on exchanging national currencies.

The recent political rapprochement between Turkey and Iran, especially on Syria and Iraq, is an important element encouraging trade. This has boosted optimism that export and import figures will be rising fast in the coming period. During his visit to Tehran, Erdogan set the target at $30 billion in annual bilateral trade. The two sides aim to enhance cooperation in every realm, from energy and tourism to road transport and defense industry.

Iranian President Hassan Rouhani stressed the two countries would be using their national currencies in banking and trade to boost economic ties. He noted they had also agreed to begin talks on increasing Turkey’s natural gas imports from Iran. The payment for the gas is expected to be in Turkish liras.