Fitch Said to Visit Iran as Foreign Banks Signal Their Interest

Ratings agency Fitch has visited Iran as more foreign banks signal an interest in working in the country six months after sanctions were lifted, according to a top Iranian central bank official.

Fitch made a trip to Tehran earlier this month to make an initial assessment of the economy, Akbar Komijani, deputy governor of the Central Bank of Iran, said in an interview on the sidelines of the International Financial Congress in St. Petersburg. He didn’t elaborate on the meetings.

Fitch “have started to review the developments in the financial sector and banking sector situations, and in general the macroeconomic conditions,” he said. “They are starting their regular activity.”

A Fitch spokesman in London referred Bloomberg to a March statement confirming the company was in discussions with Iran but declining to say if, or when, it was likely to issue a rating.

European and Asian banks, including “major” lenders, are returning to the Islamic Republic, Komijani said in the interview. “Some of the medium-sized and small banks have accelerated their operations.”

With a year left until the end of his first term, President Hassan Rouhani is following an economic reform agenda which seeks up to $50 billion in foreign investment a year and major developments in Iran’s energy, transport and heavy-industry sectors. 

Inflation Drops

Inflation has eased to single-digits for the first time in a quarter century, delivering on a Rouhani pledge to lower borrowing costs that have stymied growth. Banks have lowered interest rates on deposits to 15 percent from 18 percent, while those on loans were also brought down this week, according to Komijani.

The economy is forecast to grow between 4-4.5 percent in the year to March 20, broadly in-line with International Monetary Fund forecasts, he said. Komijani said the central bank plans to unify the rial’s two parallel exchange rates by March 2017. Currently there’s an official rate set by the bank each day, and a second unofficial price set by the open market which is more favorable to consumers and businesses.

Since most sanctions on Iran were removed in return for nuclear curbs, crude exports have risen almost to pre-sanctions levels and global companies have signed deals. Still, international banks, and many investors, have shied away from entering the country, for fear of running afoul of remaining restrictions.

“We have been pursuing accommodative monetary and fiscal policies, while we’re also managing and directing the exchange rate. We’re preparing the grounds for somewhat to experience higher GDP growth,” Komijani said.