Iran's banking sector is increasingly able to write letter of credit (L/C) business according to sources in Iran, the Gulf and Europe.

But while the Islamic Republic is reconnecting with Europe and Asia, links with the Americas and Africa remain weak.

Central bank information

Two hundred small and medium-sized international banks have started correspondent relationships with Iranian banks, Iran's central bank has told Reuters.

Iranian banks are now opening accounts and L/Cs with foreign banks and conducting "currency transfers in the form of issuing payment orders for foreign exchange services and imports", the central bank said.

It added that Iran's main banking relationships had been formed with institutions in Asia and Europe, and to a lesser extent in the Americas and Africa.

Encouraging signs

Reuters added that two foreign commercial bankers in the Gulf, who declined to be named on the grounds of commercial confidentiality, said that trade with Iran was on the increase.

EU foreign policy chief Federica Mogherini meanwhile has said that trade between the EU and Iran increased by 22 per cent in the first four months of this year, but it remains far lower than pre-sanctions levels.

Giovanni Castellaneta, chairman of Italy's export credit agency SACE, told Reuters that some small European banks without business ties to the US had started trading with Iran.

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