An Iranian official says Iran and Iraq have agreed on new mechanisms, enabling Iran to use its frozen oil and electricity exports money in Iraq’s banks.

On Monday, official news agency IRNA reported that Ali Shamkhani, secretary of Iran’s Supreme National Security Council (SNSC), made the remarks in an interview.

Mr Shamkhani said the new mechanisms would allow Iran to use its arrears, currently frozen in Iraqi banks due to the U.S. sanctions, to purchase essential goods.

He said these mechanisms and the agreements reached with UAE in facilitating bilateral trade through using the UAE’s national currency dirham, would help improve the Iranian foreign currency market.

Mr Shamkhani added that the trip to Iraq was in line with the Iranian government’s efforts to improve relations with neighbours and said the previous visits to China and the UAE by him and his team all led to significant achievements.

He added that during the visit to Iraq, solutions were worked out in talks with high-ranking economic, banking, political and security Iraqi officials to remove obstacles to enhance all-out cooperation.

During his trip, the two countries also signed an agreement on security cooperation to protect their common border.

Iraq has secured special waivers from the U.S. sanctions on Iran to import natural gas and electricity from its eastern neighbour.

However, the sanctions, which also target Iran’s banking relations with the rest of the world, have made it difficult for Baghdad to pay for its energy imports from the country.

In early January, the governor of the Iranian central bank put the value of Iran’s frozen money at Iraqi banks at $10 billion, according to Iran’s Tejarat News website. 

(Xinhua/NAN)