The Central Bank of Iran has welcomed the country’s risk rating improvement from 6 to 5 by the Organization for Economic Cooperation and Development, regarding it as another promising signal of the country’s enhancing financial and credit status in international markets.
In a statement published on its website, CBI noted that firstly, Iran will be able to receive foreign facilities at lower interest rates as a result of the upgrade announced on Friday.
“Secondly, the cost of insuring the loans received from outside the country will decrease, following the upgrade in risk rating,” it adds.
A better rating gives Iran more negotiating power in terms of setting conditions of financial deals signed with other nations while ultimately, “the atmosphere of an improved risk rating is a positive atmosphere in working with other banks and countries that will also serve to gradually eliminate the misperceptions that had formed about Iran’s financial system during years of sanctions”.
However, CBI maintains its stance that Iran deserves a better risk rating than its current 5 and will continue to improve it.
CBI Governor Valiollah Seif on Friday reacted to the improved rating on Twitter and referred to it as the fruit of unyielding efforts by the country’s banking system and businesses.
“Let’s prepare ourselves for economic reforms with increased cooperation,” he tweeted.
The head of the Organization for Investment, Economic and Technical Assistance of Iran, the main entity in charge of negotiating foreign finance and credit deals, also reacted to the upgrade.
“Political stability and security have led to the improvement of Iran’s risk rating in the eyes of OECD,” Mohammad Khazaei also told the state TV broadcaster.
Following hard-hitting unilateral sanctions, Iran’s risk rating had been downgraded to 7 but was subsequently improved to 6 last year. Iranian officials emphasize that the country deserves a much better rating in light of its high annual growth rate, high national reserves and low foreign debt to GDP ratio at 2.2%, which is lower than that of many other countries.