Decision to Pay 'Part' of Government Debt to Banks from Released Assets

Iran's Minister of Economy announced the government's decision to pay 'part' of its debt to banks from the assets released after the lifting of Western economic sanctions. According to a report on Friday, October 3, by the state news agency IRNA, Ali Tayebnia stated that the government will issue 6 trillion tomans in 'bonds' to 'adjust' its debts. He mentioned that 'a significant portion' of the funds from increased oil exports and financial resources of Iran abroad, which will be released soon, will enter Iranian banks. He emphasized that if these funds are used to pay off government debts to banks and increase the government's capital in state banks, it will help develop the private sector. Tayebnia's remarks about paying 'part' of the government debt to banks from Iran's frozen assets abroad come as government officials previously stated that the total of these assets is around 90 billion dollars, while only 29 billion dollars of these assets belong to the government. Meanwhile, reports indicate that the government owes more than 100 trillion tomans to banks. The government's debt to banks in Iran has consistently grown over the past decade. At the beginning of Ahmadinejad's presidency in August 2005, this figure was just over 11 trillion tomans, meaning it has nearly increased tenfold over the past decade. Mahmoud Ahmadinejad, in one of his last interviews with state television, claimed that he had 'zeroed out all historical government debt.' However, the Central Bank reported during Ahmadinejad's presidency that the level of his government's debt to banks had quadrupled from 2005 to 2011. Meanwhile, Hassan Rouhani, the President of Iran, stated on Monday, October 21, 2013, just a few months after Ahmadinejad's statements, that the volume of debts from the previous government to banks, private sectors, and contractors, according to investigations by the Islamic Consultative Assembly, exceeded 180 trillion tomans. The total assets of Iranian banks reached over 1 trillion and 630 trillion tomans by the end of 2014. The Rouhani government announced in a decree issued on September 21, 2014, that from now on, alongside the budget proposal, it will also present a table of government debts and claims to the parliament.