Iran expects banking relations with the rest of the world to improve by the end of its current fiscal year in March according to deputy for international affairs at the Iran Chamber of Commerce, Industries, Mines and Agriculture, Mohammad Reza Karbasi.

Letter of credit (L/C) flows are expected to improve in line banking relationships, but much is dependent on how the new US administration deals with unilateral restrictions imposed by Washington on financial services business with Iran.


"In my opinion, a major part of the country's banking problems with the international community will be resolved by the year end, but the way American officials deal with these developments will also be an important factor," Karbasi told the news portal.

"Normalising Iran's banking ties with other countries is time-consuming and relations that declined over a decade cannot be expected to improve and recover overnight," he added.

US concerns

The Iranian official seems determined to keep the pressure on the US to lift its restrictions on dealing with Iran, despite the new US administration's stance on Iran, which is more hawkish than the Obama administration's was.

US President Donald Trump has described as "horrible" the nuclear deal Iran reached with six world powers in July 2015 and implemented in January 2016. The US president cannot unilaterally cancel the deal but he has said he wants to renegotiate it.

Progress restricted

"If it were not for a number of regulation-backed measures by the US, Iran's relations with international banks and financial institutions would have normalised further," Karbasi said.

Since the removal of international banking restrictions in January 2016, Tehran has secured links with a handful of Middle Eastern and small European banks, but international banks are still shunning trade with Iran for fear of potential fines under US sanctions that remain in force.

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