Turkey and Iran issued the first letter of credit in the form of a national currency swap to exchange Iranian rial and Turkish lira Monday, according to Iran's state-run IRNA news agency. The swap will ease trade, transactions between the two countries and lower foreign currency risks after both currencies faced depreciations recently. Under this system, there is no need to rely on a third-party currency, like the U.S. dollar or euro, the news agency said quoting Iran's central bank (CBI).
In October 2017, following a visit by President Recep Tayyip Erdoğan to Iran and several rounds of negotiations between Iranian and Turkish officials, and as part of a CBI mission to Ankara, headed by Valiollah Seif, the Turkish and Iranian central banks signed a rial-Turkish lira currency swap agreement with the goal of preparing the ground for expanding economic and trade ties.
Since the current volume of trade exchanges between Iran and Turkey stands at $6 billion, taking advantage of national currencies is seen as a great help in easing trade and banking transactions between the two neighbors.