On March 30, the Governor of the Central Bank of Iran, Valioallah Seif, announced that Iran’s Bank Melli Iran (BMI) and Russian state-owned Gazprombank had agreed to open a joint account to use their national currencies for trade in lieu of the U.S. dollar. The agreement is explicitly an effort by Tehran and Moscow to circumvent limitations imposed on them by Western sanctions by reducing their dependency on the American financial system.
Simultaneously, BMI, which is the largest bank in Iran, has been negotiating with Vneshtorgbank (VTB), Vneshekonombank (VEB), Gazprombank, and Sberbank to reestablish broader business collaboration. BMI is also involved in the $5 billion credit deal between Russia and Iran intended to finance major infrastructure projects in Iran that facilitate Russian exports and services. BMI will be the intermediary institution through which VEB funds these projects.