Global Geopolitical Series: South Korea and Iran reaches agreement to use local currencies to bypass sanctions

As the United States reinstated all the sanctions imposed on Iran on Monday making it difficult for Iran to access the USD-based financial system, South Korea and Iran have reportedly reached an agreement to restart bilateral trade in local currencies. The trades will be settled in South Korean Won instead of the USD, which will make it easier for South Korean firms for the trade of non-sanctions items such as medical products, processed food, and home appliances.

The trade would be conducted through Iranian central bank and two South Korean banks; Woori Bank and the Industrial Bank of Korea.

South Korea is a major importer of Iranian crude oil and has received another 180-day waiver from U.S. sanctions but the Trump administration is pressing hard on Korea to bring the purchase of Iranian crude to a complete halt by the time the waiver expires.