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Deal with Iran boosts Turkey’s hopes of trading in national currency

Turkey has long sought to increase the use of its national currency in trade with Russia, China and Iran, but due to significant trade imbalances with the others, only Iran appears to offer a viable prospect.
A money changer counts Turkish lira bills at an currency exchange office in central Istanbul, Turkey, August 21, 2015. REUTERS/Murad Sezer/File Photo - S1BETTHGKMAB
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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.

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