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Iran's production sector needs more support from banking system

Business Materials 23 March 2020 15:23 (UTC +04:00)

TEHRAN, Iran, March.23

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The lack of support from Iran's banking system to the country's production sector is caused by the economic situation and government monopoly, said the head of Iran Export Confederation.

"The banking system mostly supports its own subsidiaries, and this creates unhealthy competition. The Central Bank of Iran's policies is affected by high volume of liquidity and uncertain capitals," said Mohammad Lahouti, Trend reports citing ILNA.

"There should be stable banking system regulations for producers, especially given that investment opportunities may be limited this year," he added. "Meanwhile, assigning financial sources should be controlled by the Central Bank of Iran to prevent possible violation and increase competition."

"If the production volume increases, the export market will naturally create more demand for domestic products; however, this is influenced by foreign currency policies and interest rates of bank advances for export of goods," Lahouti said adding that proper measures should be implemented in country's banking system to improve production.

"The capital market can provide liquidity to production since we have witnessed success in stock market," he noted.

"More investments are made in large companies that are semi-public or private, but there are fewer investors in small industries," Lahouti added.

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