Iranian government to issue $5.3B notes payable to quit downturn
Tehran, Iran, October 18
By Mehdi Sepahvand -- Trend:
The Iranian government has announced a six-month plan to reshape its economy, including the issuance of 160 trillion rials (about $5.3 billion for each 29,950 rials making 1 USD) notes.
Central Bank of Iran President Valiollah Seif also has said that bank customers will be given credit cards with up to 100 million rials credit.
He also said the Central Bank will become more flexible regarding deposits and facilities for car and housing, Mehr news agency reported October 17.
A week ago President Hassan Rouhani said the shadow of economic downturn still hangs over the country.
This came after four ministers wrote to him that if reform is not made into his economic policies, the country will witness crisis.
Economy Minister Ali Tayebnia said the low global economic growth rate and reduction in oil prices are the potential threats against Iran.
He also said lower demand in Iran is another factor.
"People have well predicted that sanctions are soon to be lifted and prices will fall. Therefore, they try to relegate their consumption to the future."
He also said that Iranian government intends to create a debt market by issuing 50 trillion rials worth Sukuk in place of government debts and another 10 trillion rials of Sukuk in the stock market.
Sukuk is an Islamic term that is used to name transferable notes payable that show shared ownership of the interest of a leased property.
He also said the government plans to issue 50 trillion rials worth of bonds and up to 50 trillion rials treasury documents in the current Iranian fiscal year (to end March 21).
Also, Seif said the same day that the Central Bank will be more flexible on legal deposits, imposing a rate of 10 to 13 percent instead of the previous fixed 13 percent.
He said the act will increase liquidity.
Head of the Planning and Management Organization Mohammad Baqer Nobakht also said the government is allocating $10 billion to revitalizing production and the targeted stimulation of demand.
He also said $2 billion from the National Development Fund and another $500 million will go into water management projects.
He also said 300 trillion rials will go into civil development projects, adding statistics have shown that each 97 trillion rials can increase economic growth by one percent.