The Central Bank of Iran (CBI) has announced that the country's banks have engaged in foreign exchange transactions worth over US$38 billion since international (but not US) sanctions were lifted in January 2016 after the Islamic Republic scaled back its nuclear ambitions.

This enabled Iranian lenders to issue 17,900 letters of credit (L/Cs), 1,900 negotiable instruments and 80,200 payment orders between January 2016 and March 2017.

L/Cs leading

The L/Cs accounted for the largest share of transactions by value at US$17.7 billion while negotiable instruments were worth US$16.6bn and payment orders US$4 billion.

The report in which these figures were published also declares the expansion of correspondent banking relations as a watershed achievement for the CBI.

Correspondent growth

The central bank says it expects the number of correspondent banking relations established by Iranian banks, which were reduced to a bare minimum by sanctions, "to gradually reach a desirable state", but notes that a number of factors have been hindering that process.

The report points to "the complicated and time-consuming processes of implementing international banking standards and regulations," which went through abrupt changes after the 2008 financial crisis when Iranian banks were largely excluded from global banking.

The central bank says it now aims to help Iran's banks reintegrate in the world's financial system, for example by adhering to International Financial Reporting Standards and meeting new anti-money laundering and financing of terrorism requirements.

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