Iran’s external debt increased to $9.3 billion by the end of the ninth Iranian calendar month to Dec. 20, the Central Bank of Iran reported. The debt is 3.5% or $317 million higher compared to the beginning of the current fiscal year last March.
Medium and long-term debt rose slightly to $7.36 billion, accounting for more than 78% of the total. Short-term debt was $1.98 billion on Dec.20, rising from $1.53 billion in March 2020.
Increase in external debt could be partly explained by Tehran’s efforts to raise funds for fighting the Covid-19 pandemic in the first months of the plague.
Iran received $50 million from the World Bank to help the health sector cope with the fatal disease, a deputy health minister said earlier.
In the meantime, the OPEC Fund for International Development also approved $500,000 in emergency grant to Iran to buy equipment needed to fight the plague.
Iran has solicited multilateral development banks for funds, in which the country is a member, namely the Islamic Development Bank and Asian Infrastructure Development Bank.
CBI’s request for a $5-billion emergency loan from the International Monetary Fund was turned down by the crisis lender under US pressure.
As per CBI data, total foreign assets of Iranian banks were 45.9% higher YOY and up 30.3% in the nine months at 15,089 trillion rials ($62 billion).
CBI foreign assets accounted for 5,824.6 trillion rials ($23b) of the total assets by Dec. 20 -- 17.8% higher compared to the same month of the previous year.
Reimbursements Planned
The government will repay $600 million in foreign debt in the next fiscal year that starts in March. The amount is projected in the proposed March 2020-21 budget, according to a press release of the Plan and Budget Organization.
Of the total, $166m will be paid to the Islamic Development Bank for loans disbursed in 2012. Commitments of the Energy Ministry and its subsidiaries worth $244m are 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. The balance is related to other development projects.
Compared with most developed countries, Iran’s financial commitments are insignificant and among the lowest in the world. Analysts say low foreign debt is not benign for economic prosperity because it also reflects the strength of a nation’s economic ties with foreign banks and international monetary institutions.
Attracting foreign investment in Iran has become much harder after the US pulled out from the nuclear deal in November 2018 and announced new sanctions on key economic, industrial and banking sectors.
