Economy, Business And Markets

Upgrade Expected in Credit Rating

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Upgrade Expected in Credit Rating
Upgrade Expected in Credit Rating

The Organization for Economic Cooperation and Development (OECD) is expected to improve Iran’s rating on long-term risk factors at a meeting on Tuesday, Kamal Seyed Ali, Export Guarantee Fund of Iran’s CEO told a press conference on Tuesday.  

“We have been holding talks with credit rating agencies, including the Bern Union, to remove Iran from the list of off-cover countries -- countries considered not creditworthy,” he said.

“We expect Iran’s credit rating to stand at 4 as the country has fulfilled all its commitments, even during the years of sanctions,” he said. While EGFI’s debts amounted to $28 billion in 2008, it met all “its commitments on time even with restrictions on money transfer.”

 Export Boost

He said the government has increased capital of the fund by $200 million and cut premium rates for export guarantee by up to 80% in a bid to prop up exports and promote export guarantee coverage.

“The lifting of sanctions last week and the plunging oil prices are an opportunity to increase non-oil exports,’’ he said, adding that such exports have the potential to annually generate $200 billion or 30% of the GDP.

An increase in non-oil exports will help pull the country’s markets out of recession, and create jobs, he told the press.

Iran’s absence from the WTO, a shortage in export funds, market recession and lack of public awareness about advantages of export guarantees are the main obstacles to export promotion, he added.

Seyed Ali called on the National Development Fund of Iran and the banking sector to improve its resources for non-oil export. “Iranian companies, especially those exporting engineering services, do not stand a chance to win international contracts without the support of domestic finance.”

Noting that the fund had provided a record $3.2 billion cover in 2009, he said “We are trying to elevate the fund’s scope to the pre-sanctions level.”

The EGFI supports Iranian exports to high-risk countries such as Iraq and Afghanistan -- countries few if any “dare to enter.”    

Asked by the Financial Tribune on the fund’s services to foreigners, Seyyed Ali said the EGFI “offers guarantees only to foreign companies that invest in export-based projects.

“Moreover, we also provide other credit agencies and export guarantee funds data related to the credibility of Iranian firms.”

Arash Shahr Aeini, EGFI deputy chief, told the Financial Tribune that the fund has reached a cooperation agreement with the United Kingdom Export Finance (UKEF) and a MoU will be signed soon.

“Suring an upcoming visit by the Japanese Prime Minister Shinzo Abe to Tehran a contract will be signed with Nippon Export and Investment Insurance,” he said. An agreement is also set to be signed with the Export Credit Guarantee Corporation of India in the near future.