Iran’s External Debt Is $8.6b, Assets $54b

EghtesadOnline: Iran’s foreign debt dropped from $9.031 billion at the end of the last fiscal year (March 19) to $8.65 billion by the end of the first quarter of current fiscal on June 21.

News ID: ۷۵۰۵۶۶

29 July 2020

The external debt dropped by 4% in the three-month period, according to data released on the Central Bank of Iran website.

Medium and long-term debt was $7.16 billion, accounting for 82% of the total. Short-term debt was put at $1.49 billion.

External debt averaged $16.132 billion from 1993 until 2017, reaching an all-time high of $28.64 billion in 2007 and a record low of $5.1 billion in 2014, according to the macroeconomic statistics website Trading Economics.

The website provides information on 196 countries including historical data for more than 300 economic indicators, exchange rates, stock market indexes, government bond yields and commodity prices.

A comparison between Iran’s debt and other developed countries shows the former’s financial commitments are insignificant and among the lowest in the world.

According to Trading Economics, external debt in the United States averaged $14.27 trillion from 2003 until 2020, reaching an all-time high of 21.23 trillion in the first quarter of 2020 and a record low of $6.5 trillion in the second quarter of 2003.

In 2018, the US owed $18.3 trillion to foreign lenders, followed by the eurozone with $14.2 trillion and the United Kingdom with $7.4 trillion, according to the Global Finance Magazine.

Analysts say reduced foreign debt is not benign for economic prosperity because the amount of foreign debt also reflects the strength of a nation’s economic ties with foreign banks and international monetary institutions. Likewise, low external debt may indicate a country’s inability to borrow from the international market.

Attracting foreign investment in Iran has become harder after the US pulled out from the nuclear deal in November 2018 and reimposed tough sanctions on key economic and banking sectors.

Rise in Foreign Assets

The CBI report said Iranian banks and credit institutions had more than 12,586.4 trillion rials ($54 billion) in foreign assets by June 21 -- up 8.7% rise year-on-year.

Foreign assets grew by 21.6% YOY to stand at 5,507.4 trillion rials ($24b). Likewise, foreign assets of commercial banks was 784.3 trillion rials, up 39.3% annually.

Total value of foreign assets held by specialized banks reached 2,068.2 trillion rials ($10) by June 21, up 85.2%.

Non-government lenders owned 4,226.5 trillion rials in foreign assets, which was 39.1% higher than the Q1 of last year.

Iran’s oil export has fallen significantly due to the US penalties. However, money from earlier oil exports are held in overseas banks because the hostile US banking sanctions make money transfers into the country almost impossible.