Central Securities Depository of Iran has signed a memorandum of understanding with Bank Mellat to help foreign investors transfer their capital into the country more easily.
Due to some US financial sanctions still being in place against Iran, foreigners have difficulties in transferring their money into the country.
“The new agreement will encourage foreigners to invest in the Iranian capital market more actively, as they do not need to be worried about the money transfer process any longer,” Mohammad Reza Mohseni, CEO of the CSDI, said in an interview earlier this week.
Market officials hope the agreement will bring in more capital. So far, It has been legally difficult for foreign nationals to open a banking account in Iran, as multinational banks have been reluctant to do business with Iran.
Mohseni said foreigners are now able to open an account in one of the Bank Mellat’s branches across the country or abroad if they are interested in investing in the Iranian stock markets.
South Korean investors have already started investing in Iran’s stocks.
“As of Now, Bank Mellat will be in charge of brokerage businesses, clearing operations and the repayment of principal and interest of investments made by foreigners, including the South Koreans, in the stock markets,” he said.
Under the agreement, Bank Mellat is committed to receiving the investors’ money and repaying it in the Iranian rial to the CSDI. The currencies are set to be changed based on free market exchange rates. However, these are foreign investors who will have to take the currency market risks.
Mohseni noted that foreigners who buy Iranian bonds will officially own them.
Release Date: 12/13/2016