Page 38 - IRANRptNov20
P. 38
average for other sectors was $3,000.
8.1.3 Deposits
Saving rates fall to 15%
Deposit rates on Iranian bank accounts were lowered to 15% with daily short-term interest rates fixed at 10% since last September in accordance with the plan set out by the CBI, Banker.ir reported.
During the past decade, interest rates have historically been above 20% with some credit institutions in Iran offering over 30% for savers. The average loan rate at its highest was 33% in 2009.
8.1.4 NPLs
CBI gives Iran’s NPL rate as 10%
The Central Bank of Iran (CBI) calculates that Iran’s overall bad debt now stands at 10% of the total debt market in the country, according to a late May Iranian Banker Journal report.
Around IRR1 trillion of bad debt existed in Iran; however other figures suggest the figure of non-performing loans is higher, with banks struggling to retrieve assets due to old-fashioned regulations which mean it takes a very long time to clear debts.
Iran’s overall NPL figure stood at 18%, according to prior CBI statistical releases. The reason behind the supposed improvement in NPL clearance is the Rouhani cabinet's move in February to approve the penalty waiver for loans amounting to IRR1bn.
8.1.5 Bank news
Fate of ‘$8.5bn owed to Iran but stuck in Korean banks depends on US election outcome’
Iran's frozen capital in South Korean banks amounts to $8.5bn and the release of the money “depends on the outcome of the US presidential election”, head of the Iran-South Korea Chamber of Commerce, Hossein Tanhaei, has reportedly said.
Speaking to the state-run Iran Labor News Agency (ILNA), Tanhaei claimed that negotiations between Tehran and Seoul to release the blocked funds—largely earned on past oil sales and which South Korea has declined to transfer given the threat of US sanctions—have failed so far, adding: "Both countries are waiting for the result of the US election." The election will take place on November 3.
Tanhaei also said that Iran had proposed a barter agreement to South Korea, with an initial focus on food and medicine deliveries and a gradual inclusion of “petrochemicals, home appliances and automobiles” in trade exchanges. Jahan-e-San'at newspaper reported on October 15 that due to US sanctions around $40bn of Iranian hard currency assets in countries around the world was frozen. Of that $20bn was said to be stuck in China.
Also according to its report, India owes Iran $7bn, South Korea $6bn, Iraq $2bn and Japan $1.5bn. Iran lately struck a barter deal with Baghdad focused on food and medicines to allow it to utilise the capital frozen in Iraq.
Tehran has previously threatened to sue South Korea over its capital frozen in Korean banks.
Before the reimposition of heavy US sanctions in 2018, South Korean annual exports to Iran were worth $4bn, while South Korea’s annual imports from Iran stood at $8bn, according to Radio Farda. South Korea's imports from Iran in the first half of the current Iranian calendar year (began March 20) were valued
38 IRAN Country Report November 2020 www.intellinews.com
