Iranian Banks' Post-Sanctions Forex Deals Top $38b

Financial Tribune – Since the implementation of the nuclear accord with world powers in Jan. 2016, Iranian banking system has engaged in foreign exchange transactions worth over $38 billion, the Central Bank of Iran announced.

From January 2016 until March 2017, 17,900 letters of credit, 1,900 negotiable instruments and 80,200 payment orders were issued by Iranian lenders, the total value of which stands at more than $38 billion, the official news website of the central bank reported.

The letters of credit formed the lion's share of transactions at $17.7 billion while negotiable instruments and payment orders were worth $4 billion and $16.6 billion respectively.

The numbers were disclosed as part of a "service report" on the occasion of Government Week (Aug. 24-30), which delineated measures undertaken by CBI during the first term of President Hassan Rouhani in office, especially since the Joint Comprehensive Plan of Action, as the nuclear deal is formally known, was implemented in early 2016.

The report points to the expansion of correspondent banking relations as a watershed achievement of the central bank after the removal of international sanctions, which mainly targeted the Iranian financial sector and led to the isolation of Iranian lenders on the world stage.

CBI expects the number of correspondent banking relations established by Iranian banks –reduced to a bare minimum by sanctions– to "again reach a desirable state gradually" but notes that a number of factors have been hindering that process.

CBI noted that it has provided comprehensive information on combating money laundering and financing of terrorism measures to the banking network, and encouraged lenders to adhere to directives issued by the High Council on Anti-Money Laundering affiliated with the Ministry of Economic Affairs and Finance.

As a result, from the date of JCPOA's implementation until the end of the previous fiscal year (March 20, 2017), the banking system has established a total of 704 correspondent relations with 249 foreign banks.