Iran has established banking relations with close to 300 foreign banks two years after the landmark nuclear deal with world powers, the Central Bank of Iran announced.

In its latest series of reports published on its website to mark the 39th anniversary of the Islamic Revolution, the bank said that by Jan. 20, Iranian banks established 818 correspondent banking relations with 284 foreign peers.

Iranian banks have linked up with Oman’s Bank Sohar, Russia’s VTB Bank, Bank Sepah’s Frankfurt branch, Austria’s Raiffeisen Bank International AG, the Qatar National Bank and Russia’s Swiss-registered Gazprombank in recent months.

As to other openings in Iran’s international financial network, CBI points to the fact that it has signed several foreign finance deals worth $45 billion in addition to signing bilateral deals with sovereign guarantors, especially European export credit agencies, since the implementation of the nuclear deal.

Those institutions include Italy’s SACE, Austria’s OeKB, South Korea’s KEXIM and KDB, Russia’s Exiar and Vnesheconombank, Exim Bank of India and China’s CDB.

Iran’s high-profile deals were mostly clinched in the last fiscal year (ended March 20, 2017), including those with South Korea, a consortium of Chinese banks represented by the investment management company CITIC Trust, and two European lenders, namely Austria’s Oberbank and Denmark’s Danske Bank.

In addition to the €2.2 billion deal signed as part of Russia’s agreement with Iran that will bankroll two state-owned projects, a “short-term contract” worth about $35 million has reportedly been signed between Japan’s SMBC and Bank Mellat.

CBI has begun the process of integrating the bank card systems of Iran and Russia, which is currently undergoing trials, but its finalization would allow citizens to use their bank cards in each other’s countries.

“What is more, preliminary efforts have been made to link up with the bank card system of Oman,” CBI reported.

This is while Iran and Turkey have reached a currency swap agreement worth 5 billion lira ($1.4 billion) and its equivalent in rial, which has been entrusted to their respective agent banks –Bank Melli Iran and Turkey’s Ziraat Bank–for financing bilateral trade and investment in their national currencies.

In addition to clearing the debts of Iranian banks to ECAs of Germany, Italy, France and Austria, the Central Bank of Iran says it has repaid debts to Denmark’s EKF, Spain’s CESE and Switzerland’s SERV through Bank Saderat.

As to other measures, CBI points to its management of the foreign exchange market and “market intervention ” as well as short-term financing of manufacturing units to provide them with raw materials.

The regulator also points to opening Usance letters of credit, boosting LC issuance by the banking system and establishing a mechanized interbank foreign exchange system for increasing the scope of deals in the market.

Source:

2018, Iranian Banks Link Up With More Int’l Peers, Tuesday, February 13, p.1,<https://financialtribune.com>