Iran economy’s recovery strengthening: IMF

“An asset quality review, related-party lending assessment, and a time-bound action plan to recapitalize banks and address non-performing loans should start immediately,” Purfield said, adding that the cost of recapitalizing banks could be covered with longterm government bond issues.

Iranian banks were weakened during the sanctions years by a sluggish economy, government interference in lending decisions, lax regulation and excessive competition with unlicensed financial institutions.

Authorities are now discussing how to deal with tens of billions of dollars of bad debt.

Central Bank of Iran has been intervening in the foreign exchange market to support the rial currency in the face of the international uncertainty.

But the IMF urged the CBI to let exchange rates move more freely and to abolish a dual system of official and market rates, saying this would prevent Iran’s foreign reserves from running down and make the economy more competitive.

Campaigning for a second term in office earlier this year, Iranian President Hassan Rouhani said easing international sanctions and addressing a high rate of inflation were national priorities. As easing sanctions make it somewhat easier to do business in Iran, Rouhani boasted after the elections that banking channels to the world could be opening up.

Inflation, nevertheless, was a drag on momentum for Iran at 9.9 percent. Purfield said while growth is apparent, it will be tested by near-team challenges in the way of “external uncertainty.”

For OPEC, Iran produced about 3.8 million barrels per day last month, a slight decline from the previous month. Total Iranian oil production last year was around 3.79 million barrels per day.