Economy, Business And Markets

Relief for Forex Debtors

Relief for Forex DebtorsRelief for Forex Debtors

A new amendment to the implementation of Article 20 of the Law to Remove Manufacturing Obstacles has eased the repayment of foreign currency debts to the Export Development Bank of Iran, the director of the bank announced on Thursday.

The debtors can settle their dues with the bank at lower forex rates. However, as a first step, they have to pay 25% of the loans taken from the Oil Stabilization Fund in rials and then go through the rest of the settlement process, Ali Salehabadi said.

Article 20 of the law to promote manufactures stipulates the procedures for the repayment of loans taken from OSF – a fund designed for capital investment or budget support against oil price fluctuations. The outstanding debt to the EDBI from this category loans is around $400 million which is hoped to be partly reimbursed by borrowers with the help of the new amendment.

Amounts collected through the repayment of debts will be considered as capital for banks which should then augment the resources of hard-pressed state-owned banks and lenders, Salehabadi said.  

Article 84 of the Fifth Five-Year Economic Development Plan (2010–2015), suspended the Oil Stabilization Fund. But the large pending amounts prompted the development of a 19-article repayment procedure within the framework of law to remove manufacturing obstacles.