Iran Posts 3% Clearance of Foreign Debts

A new report by the Central Bank of Iran (CBI) shows that the country has decreased its foreign debt by around 3% in a 9-month period between March and December 2019.
Iran Posts 3% Clearance of Foreign Debts
Date :2/15/2020

The Thursday report cited data by the Central Bank of Iran (CBI) as showing that the total foreign debts stood at $9.053 billion on December 21, 2019, a decrease of three percent compared to March 2019.

That comes as debts had reached $9.339 in March last year but then decreased by seven percent to $8.678 billion in June.

The current actual foreign debts are comprised of $1.505 billion in short-term debts and $7.548 billion in long-term ones, said the CBI.

Iran’s ratio of foreign debt to gross domestic product, which is currently around $500 billion, is among the lowest in the world.

The low level of debt comes as the country has seen its normal oil revenues significantly slashed as a result of the American sanctions.

In a bid to offset the impacts of the US sanctions, the government has been pressing ahead with various programs to diversify the economy away from oil.

A draft budget for the next Iranian calendar year which starts in late March has significantly reduced the share oil-related receipts by introducing new sources of earning hard currency, including a massive plan for export of minerals and petrochemicals.  

The CBI said in September 2019 that its own foreign currency reserves had decreased by 1.5 percent compared to June 2019 to stand at nearly $40 billion.

However, it said at the time that total foreign exchange reserves owned by the CBI and credit institutes other than official banks in Iran had risen by 13 percent to top nearly $82 billion.

In a social media post on Tuesday, CBI Governor Abdolnasser Hemmati announced that his country’s economy is refurbishing after 2 years of stagnation imposed by US sanctions, adding that Tehran has been successful in devising way around the difficult situation.

Hemmati dismissed claims that the Iranian economy could fall deeper into recession over renewed tensions with the US and said that major economic indicators showed the opposite. The chief banker reassured that the economy is emerging from a recession that began nearly two years ago when the United States imposed its unilateral sanctions on Tehran.  

Hemmati has previously cited reports by the CBI and the Statistical Center of Iran suggesting that the economy had started to grow regardless of the share of oil revenues in government budgets.

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