IMF Says Processing Iran’s $5 Billion Loan Request

EghtesadOnline: The International Monetary Fund says it is processing Iran’s $5 billion loan request submitted in March to the global crisis lender, said Jihad Azour, the IMF’s director of the Middle East and Central Asia Department.

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07 February 2021

The Iranian government made the emergency loan request in March to help combat the coronavirus and mitigate its economic impact.

The assistance request would be the country’s first loan since 1962.

Tehran continues to struggle with inflation, sanctions imposed by the previous US administration, shrinking oil sales and the pandemic, AP reported.

The request was turned down reportedly under pressure from the former US administration led by Donald Trump. Now with the change of guard in the US, there are renewed hopes the international lender would reconsider the corona-stricken country’s request for financial assistance.

“What is needed for Iran is to address the social tensions or social issues by making sure that social protection measures are geared toward protecting the most vulnerable groups,” Azour said.

Regarding a possible change of approach in Washington, he added that it was still “too early to tell how the US policy to the region will be” under US President Joe Biden, particularly in relation to Iran.

Biden has signaled a willingness to bring the US back into Iran’s 2015 nuclear deal with world powers, though his top diplomat has described America as being a ”long way” from that.

Iran was among the first countries to apply for emergency coronavirus aid under the Rapid Financing Instrument program.

Central Bank of Iran’s Governor Abdolnasser Hemmati had earlier urged the IMF chief Kristalina Georgieva to uphold the lender’s mandate, warning that denying Iran the loan would undermine IMF policy of impartiality.

He reiterated that the loan would be used for humanitarian goods, namely medicine and medical equipment.

“We believe that the humanitarian dimension of this crisis should be our guiding principle. The RFI covers financing food and medical supplies that are urgently needed to save lives and prevent the spread of the virus,” Hemmati said.

While most countries are IMF members and have voting powers, the US is the largest shareholder and can influence the fund’s decisions.

As a country hit hardest by the pandemic in the Middle East, Iran has so far reported close to 1.5 million Covid-19 cases since the beginning of the outbreak last February. The deadly disease has cut short more than 58,000 lives as it destroys lives and livelihoods.

Broad access to different coronavirus vaccines remains crucial for an economic recovery in the Mideast, the IMF said, warning that the path ahead remains “long and winding” for countries already struggling with corruption and debt.

War-torn and debt-mired nations could be further hurt by a delayed rollout of Covid-19 vaccinations, further slowing any regional economic recovery from what the United Nations has called the worst crisis to strike global employment since the 1930s Great Depression.

“This is a year of reset where we are in a race between the virus and the vaccine. This hinges on the speed of vaccination and the risks of a third wave of new mutations,” Azour said.