A senior Iranian financier says banks in the United Arab Emirates are willing to process Iran’s trade and business transactions despite sanctions that have restricted the country’s access to financial services in the Middle East.
“Two UAE banks have announced their readiness for financial cooperation with Iran and some talks on the issue have started but it has not yet become operational,” said Shahab Ghorbani, who serves as secretary general of Iran’s Union of Money Exchangers, on Tuesday.
The comments come against the backdrop of reports in the media suggesting that the UAE and Iran are planning to expand their financial cooperation with a focus on banking, money exchange and transfer operations.
Ghorbani told the ILNA news agency that a main obstacle to kick-start the transactions was the cost of the services provided by the UAE banks which he said was affected by a tax of up to five percent for each transaction based on the regulations in the Arab country.
However, he said Iranian businesses and brokers would still prefer to use the UAE, a major regional and international hub for financial services, to carry out their transactions rather than shifting to other countries like Oman.
“There have been talks about replacing (the UAE) with Oman but the currency of this country is not well endorsed in the international community,” said Ghorbani.
The reports come as Iran is seeking to find new ways to overcome the impacts of series of tough sanctions imposed by the US on the country’s nuclear program.
Iran has already established direct financial channels with countries like Iraq and India, helping businesses to continue to trade in local currencies.