Tehran's Ambassador to Moscow Seyed Reza Sajjadi announced on Friday that Iran and Russia have started using their domestic rial and rouble currencies in bilateral trade instead of the US dollar.
"(Trade) is based on our national currencies," Sajjadi told a news conference.
"We started this work long ago. Iranian businessmen are buying products in Russia and are using the rouble as (payment) currency ... The US dollar has no (economic) support base," he continued.
Sajjadi had also earlier this month told FNA thatthe proposal for replacing the US dollar with ruble and rial was raised by Russian President Dmitry Medvedev in a meeting with his Iranian counterpart Mahmoud Ahmadinejad in Astana on the sidelines of the Shanghai Cooperation Organization (SCO) meeting.
"Since then, we have acted on this basis and a part of our interactions is done in Ruble now," Sajjadi stated, adding that many Iranian traders were using rublefor their trade deals already.
"There is a similar interest in the Russian side," the envoy stated, adding that that Moscow is against unilateral sanctions on Iran outside the UN Security Council, speciallythe recent sanctions against Iran's Central Bank (CBI).
"The move (imposing sanction on the CBI) is unacceptable. Russians have clearly announced that they will not accept these sanctions and Iran's nuclear issue is resolvable just through negotiations."
Iranian President Mahmoud Ahmadinejad hit back at the US after Washington introduced new sanctions against Iran's central bank.
President Ahmadinejad told an annual meeting of senior central bank officials that Iran's central bank would respond with "force" to the new US sanctions intended to pressure Tehran to abandon its nuclear program.
He said the bank was strong enough to defeat"enemy plans".
The sanctions - which cut off from the US financial system foreign firms that do business with the central bank - are part of a defense bill signed by President Barack Obama earlier this month
The extra US sanctions aim to squeeze Iran's oil sales, most of which are processed by the central bank, although many even in the West believe that the move would prove futile.
During the last two years, Iran has been replacing dollar with other currencies in its trade with the outside world.
Iran has replaced dollar in its oil trade with India, China and Japan. Late in November, the Reserve Bank of India (RBI) issued the needed permission to the Central Bank of Iran to open rupee accounts with two Indian banks, namely UCO and IDBI, as a long-lasting solution tothe two countries' payment problems.
Both accounts were opened in the respectivebanks' Mumbai branches.
A top official of city-based UCO Bank saidwhile payments for his country's oil imports would initially be in rupees, it would be then converted into a separate currency, whichwas yet to be decided bythe apex bank.
The United States imposed additional sanctions against Iran's financial sector in late December.
Russia, opposing oil sanctions against Iran, has long promoted the rouble as an international currency which could be used in bilateral settlements.
In 2010 Moscow began offering to exchange rouble for Chinese Yuan as the two nations look to boost bilateral transactions in their own currencies and reduce their reliance on the dollar.