‘Banks to offer $23.8b of loans to production units by Mar. 2020’

September 20, 2019 - 17:26

TEHRAN- Central Bank of Iran (CBI)’s governor announced that one quadrillion rials (about $23.809 billion) of banking loans will be granted to the production units in the country by the end of current Iranian calendar year (March 19, 2020), Mehr news agency reported on Thursday.

Writing on his Instagram page, Abdolnaser Hemmati said that the issue has been discussed during a meeting participated by the president, first vice president, finance and economic affairs minister and managing directors of the acting banks.

Like the other economic bodies of the country, Central Bank of Iran (CBI) has defined supporting production as its major plan in the current Iranian calendar year, which is named the Year of Pickup in Production, and in this regard CBI governor has several times stressed that supporting production units to flourish production is the priority of the country’s banking system in current year.

In early May, the official outlined CBI plans for neutralizing or relieving the impact of U.S. sanctions on the country’s economy and mentioned providing liquidity and working capital to maintain and boost domestic production as one of those plans.

To find the best ways for supporting production, CBI is regularly holding meetings with the representatives of private sector and also with the economists.

In an Instagram post in July, the CBI governor announced the bank’s new plan for supporting production.

Hemmati mentioned this plan as “Productive Financing Plan” which is to provide finance for the production activities.

In his post, the official wrote that based on this plan, the production chain’s demand for the working capital will be met with the less inflation effect and the less expansion of credit.

The CBI governor went on to say that high production costs over the past year has sharply increased the need for working capital which has made providing finance more difficult; therefore; taking such condition into account, CBI is to define some plans for removing this problem.

CBI’s plans take two major approaches, first is that they will lead to secure finance for production activities and provide the working capital needed for such activities; and the second one is that they will not be resulted in any deviation in the banking resources and also in higher inflation.