Iranian and Turkish banking officials finalized a Bilateral Payments Arrangement (BPA) as part of efforts to facilitate bilateral trade.
An official with Iran’s Trade Promotion Organization (TPO) said the Bilateral Payments Arrangement between Iran and Turkey is meant to enhance mutual trade and promote exports.
“Economic activists and merchants can take this opportunity to further trade and accelerate the process of receiving and remitting trade payments,” Farhad Nouri noted.
Malaysia’s central bank, known as Bank Negara Malaysia, had already signed a BPA, based on an Iranian model.
According to the national Trade Promotion Agency of Malaysia, the main objectives of the BPA are to promote trade in the context of diversifying Malaysia’s trade to include non-traditional markets and also to foster closer economic and banking relationships between Malaysia and the participating countries, including Iran, Bosnia and Herzegovina, Botswana, Fiji, and Mozambique.
Based on the Iranian model of the BPA, the countries’ central banks are not involved in the settlement of financial claims arising from trade. The central banks guarantee to pay the respective foreign exporter for the export value in the event of default by the importer in their country.