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Iran chief banker urges swift IMF action on loan request

Iran’s chief banker calls on the IMF to quickly refer Iran’s loan case to the governing board of the Fund.

The newly-appointed Central Bank of Iran (CBI) Governor Ali Salehabadi has called on the IMF to speed up processing Iran’s request for loans that the country needs to tackle the economic impacts of the coronavirus pandemic.

Speaking to the International Monetary Fund’s regional director Jihad Azour in a virtual meeting on Thursday, Salehabadi criticized the IMF for refusing to process Iran’s request for receiving the loans under the Fund's Rapid Financing Instrument (RFI) mechanism apparently because of “America’s illogical pressures”.

Iran, a founding member of the IMF, put forward its request for nearly $5 billion in loans in the early months of 2020 when the country was hit by one of the largest outbreaks of the coronavirus in the Middle East.

The Iranian government rarely applies for foreign loans but authorities insist the aid is needed as the country’s access to hard currency revenues and its own funds held in other countries has been hampered because of US sanctions.

The United States government claims the secondary sanctions it has imposed on Iran since 2018 after pulling out of an international nuclear deal do not apply to humanitarian assistance.

However, banks around the world hardly process any Iranian request for settlement of trade payments fearing they would face harsh penalties related to the US sanctions regime on Iran.

Salehabadi told Azour that the IMF should treat Iran’s loan case just like similar requests submitted to the Fund by other countries since the start of the pandemic.

“There is a requirement (for the IMF) to consider helping (Iran) reduce the bottlenecks facing the firms and the households,” said the CBI chief.

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