Austria Supports Iran Risk Rating Upgrade

EghtesadOnline: The Organization for Economic Cooperation and Development should upgrade Iran’s risk classification in view of the country’s current economic situation, said the CEO of Austria’s Oberbank.

News ID: ۷۷۴۵۳۱

11 March 2017

“Austria will support the upgrade to Iran’s risk rating by OECD though the matter is partially political and will definitely take some time to resolve,” Dr. Franz Gasselsberger was also quoted as saying by the Central Bank of Iran’s official website.

The CEO of Oberbank was in Tehran at the head of a large Austrian delegation, including Upper Austria Governor Josef Puhringer and representatives of a number of companies.

The delegation attended a meeting with high-ranking officials of CBI on Thursday, according to Financial Tribune.

Gasselberger said that according to earlier agreements between Iran and Austria in the banking sector, ties in that sector have become stronger.

“Our relations continued even in the worst state of Iran’s sanctions and currently we are having relations with 21 Iranian banks, which will hopefully continue,” he added.

He noted that at present, Oberbank is the only Austrian bank that directly undertakes currency transfer to Iran.

“We hope to reach further financial agreements and intensive negotiations are underway to guarantee the transactions of the two countries’ businessmen and exporters,” he added.

Speaking in the same meeting, Vice Governor of Central Bank of Iran Akbar Komijani said the upgrade in Iran’s risk rating by OECD is related to political and economic issues.

“We hope European countries such as Austria would support our upgrade in risk rating since it would help other countries to know Iran better and take their relations with us to a higher level,” he said.

Komijani noted that establishment of branches of Austrian banks in Iran could improve business relations considerably.

Gholamali Kamyab, deputy governor for foreign exchange affairs at CBI, who also addressed the meeting, said Iran’s risk rating in OECD is now 6 out of 7, which was expected to improve to 5 in the last meeting of OECD.

“Iran has fulfilled its commitment and we expect to return to 4, our rating before the sanctions,” he added.

Kamyab noted that it is not possible for Iran to reach its desired rating at once, because the process is time-consuming and needs the support of countries like Austria.

Last June, OECD updated its risk classification and improved Iran’s ranking by one notch, moving it from seven to six. As OECD puts it, the classification is meant to reflect a country risk, which is composed of transfer and convertibility risks (i.e. the risk a government imposes through capital or exchange controls that prevent an entity from converting local currency into foreign currency and/or transferring funds to creditors based overseas) and cases of force majeure (e.g. war, expropriation, revolution, civil disturbance, floods and earthquakes).