Export Guarantee Fund: Iran will fill gap with regards to letter of credit

Business Materials 16 May 2019 08:17 (UTC +04:00)

Baku, Azerbaijan, May 16

By Elnur Baghishov – Trend:

The sanctions imposed by the US try to limit the activity of Iranian banks, but Iran will "fill the gap" and find an alternative to the letter of credit (since their usage is being hindered by the US sanctions), Afrooz Bahrami, Chairman and CEO of Export Guarantee Fund of Iran, said during the signing ceremony of an agreement between the Iranian-Iraqi Chamber of Commerce and the Export Guarantee Fund of Iran, Trend reports referring to ISNA.

According to Bahrami, Iranian exporters have been faced with problems in recent months due sanctions having been imposed on Iran's banking system.

However, under the current conditions, the Export Guarantee Fund may eliminate some of these problems, she added.

"The Export Guarantee Fund can even take such steps as provide guarantees for foreign investments and provide working capital for manufacturing companies in order to improve the situation," he said.

Bahrami went on to say that the fund has already raised its share to $2.3 billion.

"This figure makes up about 5 percent of Iran's non-oil exports. However, the share of the fund in many developed countries is 10 percent, and this figure even reaches 20-30 percent in some Eastern Asian countries," she said.

Bahrami said that the fund is planning to bring its share to the global average in a short period of time.

Noting that the markets of neighboring countries are among the most important strategies of the Ministry of Industry, Mine and Trade of Iran, Bahrami stated that Iran is aiming to increase its share of 2.5 percent in the exports to neighboring countries.

The US imposed sanctions, mainly on Iran's oil and banking sector, in November 2018, while providing a 6-month exemption period for 8 countries buying oil from Iran. The period ended on May 2 and was not prolonged by the US. Moreover, the US added Iran's metal industry to the list of sanctions on May 8, 2019.