Foreign Debt Down 7%

EghtesadOnline: Iran’s foreign debt reached $8.47 billion by the end of the calendar month to January 21.

News ID: ۷۸۷۷۸۰

16 March 2022

According to Central Bank of Iran data, the amount was 7.3% lower compared to the beginning of the fiscal year that ends on March 20 when it was $9.142 billion.

Medium and long-term debt was $6.375 billion, the CBI  website said. Short-term debt increased to $2.99 billion.

Short-term debt includes all debt with original maturity of one year or less as well as interest on long-term debt.

Due to the difficult economic conditions and other challenges, namely the 2018 US economic blockade, Iran’s external debt is significantly lower compared to peer countries in the developing world.

Tehran has failed to attract foreign investment for years because the tough sanctions, cumbersome laws and economic uncertainty have kept foreign investors away.

Most of Iran’s overseas debt in the past two years was for fighting the coronavirus pandemic. Tehran received $50 million from the World Bank to help the health sector cope with the fatal disease.

The OPEC Fund for International Development gave $500,000 in emergency grant to buy equipment to help fight the plague.

Iran solicited multilateral development banks for funds, in which the country is a member, namely the Islamic Development Bank and the Asian Infrastructure Development Bank.

Recently, the Organization for Investment, Economic and Technical Assistance of Iran said the World Bank agreed to pay $90 million to cope with the spreading coronavirus.

Ali Fekri, head of the organization, said the loan will be given to the Health Ministry to import Covid-related medical equipment.

CBI’s request for a $5 billion emergency loan from the International Monetary Fund was turned down by the crisis lender in March 2020 under US influence when Donald Trump, a rabid enemy of Iran now facing criminal charges in US courts, was in the White House.

The Plan and Budget Organization earlier said the government was supposed to repay $600 million in foreign debt.  Of the total, $166m was to be paid to the Islamic Development Bank for loans disbursed in 2012.

Commitments of the Energy Ministry and its subsidiaries worth $244m are also on the repayment list. The loans were taken for development projects.

Reimbursements also include $64m to the OPEC Fund for International Development. Iran also has to reimburse part of its debt ($56m) to the World Bank.