News Code: 2788

Date of Release: 2018-08-06

EDBI, Moscow Mir Business Bank sign refinance contract

Export Development Bank of Iran (EDBI) signed a short-term refinance contract with Moscow Mir Business Bank to facilitate imports of staple goods. Worth €10 million, the agreement will enable Iran to pay for imports of staple and necessity goods, drugs, medical devices and raw materials for production units, IRNA reported. The interest rate of the […]

Export Development Bank of Iran (EDBI) signed a short-term refinance contract with Moscow Mir Business Bank to facilitate imports of staple goods.

Worth €10 million, the agreement will enable Iran to pay for imports of staple and necessity goods, drugs, medical devices and raw materials for production units, IRNA reported.

The interest rate of the facilities to be paid to the Moscow-based bank for the refinance periods stands at 2.5 percent per annum.

As per regulations, paying for imports under the contract will be limited to purchases from Russia and other member states of Commonwealth of Independent States.

In addition, after obtaining the permit from the related ministry, exports from these states are required to be destined only for Iran.

Refinancing is the use of short-term (usually one year) interbank facilities. By using the resources of their branches in other countries and those of the foreign counterparts, banks offer short-term foreign currency facilities in the form of refinance lines of credit. Since the interest rates of such facilities is lower than that of rial facilities, they can help importers by lowering the cost of purchases.

In the first half of 2017, trade between Iran and Russia witnessed a 36-percent growth year-on-year. Earlier, Russian Ambassador to Iran Levan Dzhagaryan said trade between Moscow and Tehran reached $2.2 billion in 2016.

He listed major Russian exports to Iran as transportation sector machinery and equipment, foodstuff and metals.

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