Iran's steady climb up the credit risk-rating index is helping to reduce letter of credit (L/C) costs according to an Iranian business leader.

Vice chairman of the Iranian Chamber of Commerce, Industries, Mines and Agriculture, Hossein Salahvarzi, says these circumstances are allowing businesses to save as much as 10 per cent of their total spend on financing.

Attracting investment

Salahvarzi told local media that Iran's improved credit risk rating can "reduce spending in the field of opening L/Cs or foreign financial resources."

As well as making trade finance more affordable, Iran's improved credit rating would also help the country attract foreign direct investment.

Exchange rate risk

Salahvarzi added that one unhelpful dynamic in the economy was exchange rate volatility, which he thinks particularly hinders Iran's ability to promote non-oil exports.

He called on the government to adopt measures to stabilise the country's foreign exchange market.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.