Copy in clipboard...
Banking hurdles cleared for Iran to access funds in Iraq
Iranian Central Bank Governor Abdolnasser Hemmati said recent talks with Iraqi officials have removed obstacles to banking transactions between the two countries, paving the way for Iran to access its funds in the coming weeks.
He said during a televised speech on Wednesday evening that during a meeting with the Iraqi prime minister Ali al-Zaidi, the collection of outstanding payments and efforts to accelerate economic ties were among the key issues discussed.
One of the main outcomes of the talks was the Iraqi prime minister’s agreement to issue guarantees for Iranian contractors backed by Iranian assets held in Iraqi banks, Hemmati said, adding that implementation orders have already been issued.
“Given the positive approach and readiness of Iraq’s new management team, new opportunities have opened up for expanding economic ties and strengthening trade cooperation between the two countries,” he added.
Iran is owed around $12 billion by Iraq for gas and electricity exports as well as contracting services. US sanctions have blocked Iran’s access to its foreign-currency assets held in Iraqi banks.
In recent years, part of Iran’s outstanding claims on Iraq has been used through various mechanisms to finance imports of essential goods and meet Iran’s foreign-currency needs.
Iraq, however, has faced an additional constraint in recent months. A sharp decline in oil revenues, attributed to the closure of the Strait of Hormuz and disruptions to oil exports, has limited Baghdad’s ability to make direct payments to Iran.