The managing director of the Export Guarantee Fund of Iran (EGFI) has written to the Iranian president asking for more authority for the fund to step in to provide finance for traders unable to access letters of credit (L/Cs) due to US sanctions.

Iran is looking at several mechanisms to finance international trade and mitigate the impact of Washington's sanctions that have made international financial institutions across the world stop issuing L/Cs for transactions with Iran.

L/C replacement

In a letter to President Hassan Rouhani, managing director of EGFI, Afrouz Bahrami, has called on the government to give more authority to EGFI to issue export guarantees.

The export credit agency says it can provide export guarantees to non-oil exporters to substitute banks' L/Cs at a time when the economy is saddled with mounting economic and banking restrictions imposed by Washington.

Presidential intervention

"We have asked the president to authorise EGFI to move on a path separate from the banking system regarding export guarantees," Bahrami told the Iranian News Agency.

In May, Bahrami said that EGFI and some European countries will sign agreements to facilitate trade relations.

The agreements aim to create new finance mechanisms for Iran-Europe trade in the light of US sanctions imposed on Iran.

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