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Russia shuns US dollar further as it seeks deals with Iran and Turkey using local currencies

President Vladimir Putin traveled to Tehran on Tuesday to meet with the leaders of each nation, and Turkish President Recep Tayyip Erdogan planned to discuss a Russian energy deal denominated in currencies other than the dollar, sources told Bloomberg.

According to the report, Turkish officials said the two countries were in talks for a trade deal using the lira, which would help Turkey slow the decline of its sovereign reserves and help Moscow shield itself from the impact of Western sanctions. .

Under the proposed deal, Turkey would be able to pay in lira for energy imports, which could then be used by Moscow to make purchases from Turkish sellers. The report noted that rubles would be part of any deal between the two nations.

Last year, Russia was responsible for a quarter of Turkey’s crude imports and around 45% of its natural gas. Bloomberg data shows that Turkey’s exports to Russia reached $6.5 billion last year, while its imports topped $29 billion.

Putin also said on Tuesday that Russia and Iran had discussed the use of national currencies for bilateral trade, Reuters reported.

The comment came as energy giants Russia and Iran this week hit a $40 billion preliminary deal to develop oil and gas projects, Iranian state media said.

Russia’s pursuit of trade deals in alternative currencies indicates that Moscow is moving further and further away from the dollar, which is usually the primary currency for international trade.

Meanwhile, Russia is seeking to trade oil with India using the local currency of United Arab Emirates. An invoice reviewed by Reuters showed an Indian refiner was asked to pay for imports in dirhams, and the report added that similar deals are yet to come.