CBI Post-Sanctions Policies Yield Positive Results

EghtesadOnline: Hard-hitting sanctions drove the Central Bank of Iran to direct the bulk of its focus toward boosting economic growth and job creation, and as the vice governor of the regulatory entity outlines, those policies are now increasingly bearing fruit.

News ID: ۷۴۴۵۹۹

30 December 2017

Akbar Komijani was in the central province of Yazd late Wednesday to take part in a meeting of the Resistance Economy Council, which was also attended by Bank of Industry and Mine CEO Ali Ashraf Afkhami, the bank’s board of directors and members, in addition to the province's governor general and other officials.

Komijani first directed attention toward the package of bank loans amounting to 500 trillion rials ($11.93 billion) that have been considered by the administration for the current fiscal year to March 2018 to reinforce productive sectors and create job opportunities, IRNA reported.

“While 300 trillion rials ($7.14 billion) of the aforementioned sum have been considered for boosting production in the country, the remaining loans will be covered by banks’ specialized resources for increasing employment,” Financial Tribune quoted him as saying.

The senior CBI official noted that supporting 20,000 manufacturing enterprises has been on top of the government’s agenda since the beginning of the current fiscal year.

As the official pointed out, following the approval of the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei, $1.5 billion from the resources of the National Development Fund of Iran were allocated to boost employment in villages and nomadic areas.

That is while the government also allowed the banks to tap into NDFI resources to an equal amount with the same aim, bringing the grand total to $3 billion.

Komijani said Iranian banks collectively paid more than 5.48 quadrillion rials ($148.1 billion) in loans last year while the figure is projected to exceed 6.7 quadrillion rials ($159.5 billion) this year.

He pointed out that all the aforementioned measures are in line with revitalizing the economy and boosting job creation.

"In order to support production and employment, the share of loans as working capital from all bank loans has increased from 46% [at the beginning of President Hassan Rouhani's first tenure in 2013] to 65%, which is going to continue through the current fiscal,” he said, adding that all the components of the industrial and mining sector have come out of recession and are posting positive growth rates.

The official also said the country’s housing sector has marked positive growth since the beginning of the second half of the current fiscal year on Sept. 23 and expressed hope that the key sector’s improvements picked up pace in the fourth quarter of the current Iranian year (started Dec. 22).

Continuing this thread, Komijani spoke of home loans in Yazd Province and said 98% of all applicants of such loans have succeeded in receiving one, which is in line with the average country-wide figure.

Progress made by the banking system in terms of foreign relations following the implementation of the Joint Comprehensive Plan of Action–as Iran’s nuclear accord with world powers is formally known–was the next topic broached by the monetary official.

“Before the implementation of the nuclear deal, only 27 international banks had some kind of links with us and that was a small number, but after the nuclear accord, we managed to establish correspondent relations with more than 330 international banks,” he added.

Komijani said that despite all the improvements witnessed in the banking system after the nuclear accord and the promise held by them, the country is still under US scrutiny.

However, he added, the country has direct access to oil revenues and foreign finance.

In conclusion, Komijani heralded that the central bank will soon publish a slew of new statistics that will show the positive economic results yielded in the second quarter of the current fiscal year (Sept. 23).

The latest economic statistics recently published by the Statistical Center of Iran indicate that the nation's economy grew by 5.6% in the first half of the current fiscal year (March 21-Aug. 22) compared with last year's corresponding period.

SCI has put H1 growth at 6% without taking into account oil production.

The report further shows that gross domestic product stood at 3.82 quadrillion rials ($91.29 billion) for the aforementioned six months, including the oil sector. GDP, excluding the oil sector, stood at 3.05 quadrillion rials ($73.01 billion).