BAKU, Azerbaijan, Jan. 22
Currently, the volume of Iran's foreign debts is extremely small, Iran`s Deputy Minister of Economy said.
"One of the main concerns in the world about the debt ratio is that a significant part of it is the debt of foreign countries, ie a country's share in using the foreign financing and international loans which makes a government owe foreign countries,” the Deputy Minister of Economy Mohammad Ali Dehghan Dehnavi said, Trend reports citing Mehr News Agency.
He went on to say that if this ratio goes up, the country will lose its global credibility.
The Deputy Minister of Economy said that using the foreign debt is a great opportunity, meaning that the government can borrow from abroad and invest inside. Dehghan Dehnavi stated that the main debt of the Iranian government is "domestic" so the government does not risk defaulting on foreign debt.
External debt is the portion of a country's debt that is borrowed from foreign lenders including commercial banks, governments, or international financial institutions. These loans, including interest, must usually be paid in the currency in which the loan was made. Foreign debt as a percentage of Gross Domestic Product (GDP) is the ratio between the debt a country owes to non-resident creditors and its nominal GDP. Iran’s external debt has been falling in recent years following a downward trend.