Iran's Raisi visits Indonesia, announces agreement to ditch dollar

Iran's President Ebrahim Raisi said Tehran and Jakarta have decided to stop using the dollar in their bilateral trade as he visited the southeast Asian Muslim nation on Tuesday, his website reported. 

Standing next to his Indonesian counterpart Joko Widodo at a televised presser in Jakarta, Raisi declared that the two sides were now set to use the Iranian national currency, the rial, and the Indonesian rupiah to replace the conventional US dollar in their economic relations.  

Under years of onerous US sanctions and international banking restrictions, the Islamic Republic has seen its foreign economic ties increasingly strangled. Tehran's outstanding payments in US dollars from South Korea and Iraq remain frozen. In many other countries, it has had to accept commodities rather than dollars. Finding its foreign currency reserves dwindling and the value of its national currency plummeting to record lows, Iran has been scrambling, recently trying to abolish the dollar in its foreign trade, including with China, Russia and India.

The de-dollarization drive has paid off, the country's finance minister said earlier this month, claiming that the presence of the American currency in Tehran's international trade has dropped to as low as 10%.  

Raisi also announced that Iran and Indonesia were aiming to push their annual trade to $20 billion. The ambitious figure compares to that of 2022, when the volume stood at $1 billion, according to the Tasnim News Agency. Of that, over 84% was Iranian oil and steel exports, while some 12% was made up of Indonesia-made motorcycles and auto products imported by Tehran. Last year's figure still marked a 20-year high, Tasnim reported.  

For his part, the Indonesian president expressed hope that the preferential deal "would increase trade" between the two nations. He said he had discussed with Raisi opportunities for Iranian investors to play a role in the construction of Indonesia's new capital, Nusantara, a massive project on the country's Borneo island, which has been planned to replace the overcrowded Jakarta.

During Raisi's visit, Tehran and Jakarta also inked 12 memoranda of understanding, including one focusing on preferential trade and another that lays out a visa-free regime to ease travel for the two nations. 

"Sanctions and threats have failed to block Iran's path," Raisi said at the news conference. The Iranian president added that Tehran was "prioritizing" relations with Islamic countries, pointing out commonalities with Indonesia such as "a shared commitment to back the rights of Palestinians until the liberation of the sacred al-Quds."  

Hours after the presser, Iranian news outlets released videos of Raisi at Jakarta's Islamic Cultural Center, the leading Shiite foundation in the Sunni-majority country. The center is largely run by graduates of the Qom Seminary, Iran's state-funded clerical and ideological base with a mission to disseminate Shiite Islam worldwide.