Iran has formally become a full member of the Shanghai Cooperation Organization (SCO), marking a significant moment in the country's international relations.

The news was confirmed on July 4, in a declaration adopted at the conclusion of the online SCO summit held in New Delhi. The timing does appear to be arbitrary either, as it coincided with the Independence Day of its implacable foe, the US.

Clerics rejoice

Iranian President Ebrahim Raisi commended the decision via videolink, stating that it would create conditions for enhancing security, sovereignty and sustainable economic development within the country.

Raisi also called for a swift transition to settlements in national currencies between nations and for eschewing the US dollar in bilateral trade, highlighting the crucial role of economic independence.

“The hegemony of the Western world contributes to the hegemony of the dollar,” Raisi said.

“In order to create a new economic order, it is necessary to remove this instrument of hegemony in world practice, to use national currencies in settlements between countries,” he added.

The official declaration published on the Kremlin's website reads: “Member states stressed the historic significance of the admission of the Islamic Republic of Iran to the SCO as a full member state.”

This signing is a coup de theatre for the Kremlin, mired in its war in Ukraine, and for China, which has been flexing its international diplomatic muscles in recent months by bringing both Iran and Saudi Arabia to the negotiating table to establish a truce, backed by Beijing.

The SCO summit, which took place remotely in New Delhi on July 4, culminated in the signing of the New Delhi Declaration by the Council of Heads of State of the SCO.

The declaration reaffirmed that the association's aims are not directed against other countries and underlined its openness to broad co-operation.

Iran's acceptance as the ninth full member of the SCO also now underscores the changing dynamics of international relations in the region.

Since the inception of the Islamic Republic in 1979, the clerical leadership has been shunned by the Western-led world, while at the same time it has also faced down Communism from Moscow and Beijing.

Russia delighted

However, since China’s opening-up to the world and Russia’s changing economic conditions since the fall of USSR, Iran has increasingly found itself in the middle of a rapidly moving regional environment.

The SCO accession also paves the way for Iran to participate more actively in regional security and economic affairs, providing opportunities for the country to strengthen its position on the international stage while no longer being an outlying pariah.

Vital for Iran

Vladimir Evseev, the Head of the Department of Eurasian Integration and Development of the SCO of the Institute of CIS countries, in an interview with TASS, emphasised that this milestone is vital for Iran.

He said the US had successfully put Iran in a state of political isolation for years, and full SCO membership symbolises that SCO member states are against this policy of isolation.

"The promotion of Iran's status in the SCO from an observer level to full membership indicates that the SCO family's countries, mainly the SCO member states, are against the policy of isolating the Islamic Republic of Iran, else Iran would not have been accepted into the SCO," he explained.

Evseev highlighted that Iran's SCO entry not only disrupts this US-led isolation but also allows the SCO to access the Near and Middle East, primarily the oil- and gas-rich Persian Gulf.

Rial doesn’t gain

Despite official talk of security guarantees and economic integration by President Raisi and his cabinet, the Iranian rial (IRR) has failed to gain against the US dollar on the informal market.

Traders on Tehran’s Ferdowsi Street were circumspect in their praise of Tehran’s ascension to the SCO on July 4, with many suggesting that despite a brief gain against the greenback, people remained unsure of what the new deal means for the country’s currency.

By close of trade the rial was continuing to trade above IRR500,000 against the US dollar, a new floor after recent gains in the past few months.