JCPOA enforcement leads to SWIFT resumption

TEHRAN, Nov. 21 (MNA) – Pointing to the country's little foreign debt, the governor of the Central Bank of Iran (CBI) said by JCPOA enforcement, financial transfers, banking activities, insurance and SWIFT will resume.

Addressing European and German bankers at the Conference of the 18th Euro Finance Week in Frankfurt, Valiollah Seif said CBI will guarantee foreign investment as well as its profit.

"The international community could enjoy the benefits of economic ties with Iran; Iran possesses a huge economy GDP of which resides among the 20 largest economies in the world being the second largest economy in the Middle East; Iran holds several production factors, young and educated workforce, developed infrastructure and huge natural resources at its disposal; Iran has the largest natural gas reserves and the fourth largest oil reserves in the world;" highlighted Seif adding that "these factors combined with productive workforce and cheap energy, creates a competitive advantage for Iranian companies."

He further asserted that, "with regard to the external balance, Iran's economy holds a strong position in terms of international reserves due to low level of foreign debts an no history of default in payment, even in times of war or sanctions."

The official referred to the fact that Iran's economy is known for European markets and both sides have a history of long-term partnership; "In 2010, Germany was one of Iran's largest trade partners with a trade worth 2.7 billion dollars and our banking system has correspondent relations with 27 German banks."

Deeming 'rational macroeconomic policies' and 'integration into the global community' as two major factors consisting the prospects for the country's economy in the next decade, CBI governor noted "during the course of talks with the 5+1 group of countries, the Iranian government made great efforts to rebuild its relations with the international community and JCPOA indicates that Iran believes in the benefits of cooperation and trade."

"CBI and the government have implemented certain policies over the past two years in order to provide stability at the level of macro-economics and the government committed itself to boost growth and tackle high inflation by adopting a more transparent and more stable monetary and fiscal policies which led to a significant reduction in inflation as well as increase in growth rate," Seif added.

The official underlined that low inflation brought more stability to the currency market; "the growth rate moved all the way from -6.8 during the height of recession to +3 at the moment while we believe that the rate can reach +8 in five years' time."

"CBI has also implemented certain reforms to enhance financial stability, effectiveness of monetary policy as well as efficient allocation of resources in the banking sector leading to expansion of the scope of the Central Bank supervision and reducing measure and intend to target the health of banking balances by reducing outstanding loans," he underlined.

Stressing that the recent agreement between Iran and the 5+1 brings about important regional and global effects, Seif reiterated "lifting of sanctions will allow Iran to resume oil exports, attract foreign direct investment and get involved in all economic issues with the rest of the world; JCPOA will particularly affect the banking system which was undergoing the heaviest sanctions and financial transactions, banking activities, insurance and SWIFT will all get resumed."

"No doubt, the agreement will lead to improvement of internal and external business environment; thus, the authorities are determined to implement JCPOA being an important factor to reduce the potential risk of investment in Iran," he explained.

The official emphasized that the nuclear deal has sparked a good deal of excitement among the international companies to return to Iran; "the issue especially holds true about financial institutions; we feel the obligation towards the international counterparts to provide an atmosphere which supports their entry, promotes financial stability and encourages investment."

"Currently, international investors are allowed to own 100 per cent of free zone banks and 40 per cent of mainland banks and we offer the potential to build up joint bank to facilitate trade; CBI supports foreign investment by offering guaranteed investment and performance," Seif noted.

He maintained that, "as a result of sanctions, Iranians were deprived of access to international banking services where they were forced to transfer money using unconventional methods but we need to change the situation."

At the end of his remarks, the Central Bank governor said, "implementation of JCPOA will take 15 years and currently, we expect to have long-term relationships with global banking partners because short-term interactions will offer little advantage while having a long-term perspective marks a critical element in investment in the banking sector of Iran."

 

HA/2972783

 

News Code 112113

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