EghtesadOnline: Since the implementation of the nuclear accord with world powers in Jan. 2016, Iranian banking system has engaged in foreign exchange transactions worth over $38 billion, the Central Bank of Iran announced.
From January 2016 until March 2017, 17,900 letters of credit, 1,900 negotiable instruments and 80,200 payment orders were issued by Iranian lenders, the total value of which stands at more than $38 billion, the official news website of the central bank reported.
The letters of credit formed the lion's share of transactions at $17.7 billion while negotiable instruments and payment orders were worth $4 billion and $16.6 billion respectively.
The numbers were disclosed as part of a "service report" on the occasion of Government Week (Aug. 24-30), which delineated measures undertaken by CBI during the first term of President Hassan Rouhani in office, especially since the Joint Comprehensive Plan of Action, as the nuclear deal is formally known, was implemented in early 2016, according to Financial Tribune.
The report points to the expansion of correspondent banking relations as a watershed achievement of the central bank after the removal of international sanctions, which mainly targeted the Iranian financial sector and led to the isolation of Iranian lenders on the world stage.
CBI expects the number of correspondent banking relations established by Iranian banks –reduced to a bare minimum by sanctions– to "again reach a desirable state gradually" but notes that a number of factors have been hindering that process.
The report points to "the complicated and time-consuming processes of implementing international banking standards and regulations", which went through abrupt changes after the 2008 global financial crisis when Iranian banks were entirely excluded from the picture.
The central bank outlines efforts in preparing banks to catch up on the lost time, referring to regulations aimed at increasingly conforming the Iranian banking system to international standards.
Among other things, the bank refers to its directives obligating lenders to adhere to International Financial Reporting Standards and ordering banks to improve their capital assets in line with Basel Committee standards.
CBI noted that it has provided comprehensive information on combating money laundering and financing of terrorism measures to the banking network, and encouraged lenders to adhere to directives issued by the High Council on Anti-Money Laundering affiliated with the Ministry of Economic Affairs and Finance.
As a result, from the date of JCPOA's implementation until the end of the previous fiscal year (March 20, 2017), the banking system has established a total of 704 correspondent relations with 249 foreign banks.
In its report, the central bank also pointed out that in support of production, it directed the banking system to dole out 5.48 quadrillion rials ($146 billion) worth of loans during the previous fiscal year, which registered a 31.4% increase compared with the year before.
According to CBI figures, 64% of the loans were allocated to small- and medium-sized enterprises to provide them with much-needed working capital while the industries and mines sector bagged 82.3% of the credits.
During the first four months of the current fiscal year to July 22, the total volume of loans allocated by the banking system stood at 1.53 quadrillion rials ($40.2 billion), which has had an 18.4% increase compared with the same period of last year.
During this period, 64.9% of the loans were given as working capital to production units while the industries and mines sector again took 86.7% of the funds.
CBI listed the constant effort to keep the inflation rate at its current level of 10% after reducing it from the 40% witnessed a few years ago, the significant boost to GDP growth, stability in the foreign exchange market, reduction of bank interest rates, control of macro monetary variables and extension of the large number of marriage loans as its other achievements under its current governor, Valiollah Seif.