Iran’s foreign debt was $8.83 billion by end of the third quarter of the current fiscal year ending Dec. 21.
According to Central Bank of Iran data, the foreign debt was $518 million or 5.5% lower compared to the corresponding quarter last year.
Medium and long-term debt was $6.429 billion, accounting for more than 72% of the total. Despite decline in long-term debt, short-term debt increased to $2.4 billion, rising from $1.984 billion in Dec. 2020.
Short-term debt includes all debts with original maturity of one year or less as well as interest on long-term debt.
Due to the difficult financial conditions and other challenges, namely the 2018 US economic blockade, Iran’s external debts is very low compared to peer countries in the developing world.
Tehran has failed to attract foreign investment in recent years because the sanctions, cumbersome laws and economic uncertainty have kept foreign investors away.
Most of Iran’s foreign borrowing in the past two years was for fighting the coronavirus pandemic. Tehran received $50 million from the World Bank to help the health sector cope with the fatal disease.
The OPEC Fund for International Development also approved $500,000 in emergency grant to buy equipment to help fight the plague.
Iran has solicited multilateral development banks for funds, in which the country is a member, namely the Islamic Development Bank and the Asian Infrastructure Development Bank.
Most recently, the Organization for Investment, Economic and Technical Assistance of Iran announced that the World Bank agreed to pay $90 million to assist cope with the spreading coronavirus.
Ali Fekri, head of the organization, said the loan will be given to the Health Ministry to import Covid-related medical equipment.
Iran is the epicenter of Covid-19 pandemic in the Middle East region. More than 6.5 million have been infected by the virus since the outbreak of the infectious disease in February 2020 and 133,000 people have died.
CBI’s request for a $5 billion emergency loan from the International Monetary Fund was turned down by the crisis lender in March 2020 under US influence when Donald Trump, a sworn enemy of Iran now facing criminal charges in US courts, was in the White House.
The Plan and Budget Organization earlier said the government was supposed to repay $600 million in foreign debt. Of the total, $166m was to be paid to the Islamic Development Bank for loans disbursed in 2012. Commitments of the Energy Ministry and its subsidiaries worth $244m are also on the repayment list. The loans were taken for economic development projects.
Reimbursements also include $64m owed to the OPEC Fund for International Development. Iran also has to reimburse part of its debt ($56m) to the World Bank.
