Iran has signed memoranda of understanding and protocols pertaining to monetary agreements with 10 countries, the Central Bank of Iran’s head of Exports Department said.

Addressing the First Conference on Financing Exports in Tehran on Sunday, Samad Karimi added that apart from finance and refinance deals, the bank has pursued monetary swap agreements and finalized three, IBENA reported.

He noted that Turkey and Pakistan have implemented monetary agreements with Iran, but did not mention the third country.

Iran and Turkey finalized their currency swap agreement in October, based on which a credit line of 5 billion lira ($1.4 billion) and its equivalent in rial were allocated to Bank Melli Iran and Ziraat Bank to be employed by the two traders.

According to Karimi, Iran and Pakistan have agreed to settle any deals in euros every three months based on the volume of imports and exports.

 EGFI Moving Abroad

Speaking at the same conference, the director of Exports Guarantee Fund of Iran announced that the fund has approved the preliminary draft of a permit allowing it to open its first overseas branch.

Seyyed Kamal Seyyed Ali added that Iran’s trade balance has been positive in the past two years and is predicted to remain that way during the current year as foreign exchange rates have gone up, but it might become harder next year when imports overtake exports.

In light of Iran’s high forex reserves, low foreign debts and strong economic growth, Seyyed Ali was hopeful that the country’s risk rating will improve to 4 or even 3 in the foreseeable future.

The Organization for Economic Cooperation and Development in late January upgraded Iran’s risk rating from 6 to 5 in what was a long-awaited and anticipated move.

 Credit Lines, Finance Deals

The chief executive of Export Development Bank of Iran was another keynote speaker at the event and he began his remarks by pointing to the bank’s negotiations for credit lines.

“So far, a €5 million buyer’s credit deal has been signed with a bank in Armenia, alongside a €10 million deal with a Russian bank and an €18 million deal with Iraq’s Al Bilad Bank,” Ali Salehabadi added.

The EDBI chief noted that in addition to these deals, negotiations are underway with the banks of France, Spain, Oman, Nigeria and Cuba to allocate credit lines as finance and refinance lines.

Recently, a $100 million refinance deal was signed with the Export–Import Bank of Korea, in addition to the $25 million and $35 million deals reached with the Paris branch of Tejarat Bank and Turkey’s ECO Trade and Development Bank respectively.

The CEO pointed out that resources granted to EDBI by the National Development Fund of Iran are allocated to exporters at 11% while the bank offers facilities at rates of 16-18%, bringing the average to 14%.

Salehabadi vowed that his bank will reduce the interest rates on its foreign currency loans.

The conference also featured remarks by the head of Trade Promotion Organization, who defended the role played by the nuclear deal and the revival of banking relations in support of exports.

Mojtaba Khosrotaj added that some complain that correspondent relations established with foreign banks are not sufficient, stressing that a significant portion of the country’s imports are currently handled using letters of credit.

Source:

2018, Monetary Agreements With 10 Countries, Monday, February 19, p.1,<https://financialtribune.com>