Central Bank of Iran (CBI) said here Saturday that the change in rating means that the Fitch has lowered by one notch its credit risk assessment on Iran.
Iran's credit improvement stems form lowest level of government debt and foreign denominated obligations among the countries which it surveyed, the report added.
It also singled out Iran as having one of the best standing in terms of liquidity in the list of the nations under consideration.
Fitch said the high oil revenues renders solid backing to the country's current assets and bode well for the aim of meeting the government short-term obligations, a policy which in line with instituting economic reforms, enjoys the high-ranking official's full support.
Fitch further reckoned that the oil revenues to stand at dlrs 34 billion, while it expects that the increase in government expenditures o out pace the growth in revenues.
It, however expressed concern on lack of fiscal discipline in expenditures, notably over the allocation of surplus oil revenues from the Foreign Exchange Reserves Fund as "detrimental" in case of drop in oil revenues.
It said that the ramification on lowering trade restrictions and implementing policies related to determining foreign exchange rates will slowly be felt in the economy.
It also lauded the Expediency Council's directive on expediting the privatization drive, including ceding of several state-owned banks' shares to the public, as a crucial step in instituting economic reform.
The Expediency Council, the top policy making body, in December approved a plan to cede to the cooperatives and private sectors 65 percent of the shares of several state banks, state insurance companies, airlines, power generation and transmission firms and telecom networks.
The Expediency Council has embarked on modifying Article 44 of the Constitution as a step towards economic reforms. The article stipulates state monopoly over the economic domain.
The Central Bank of Iran (CBI), Bank Melli Iran (BMI), The Industry and Mine Bank, the Agriculture Bank, the Maskan (Housing) Bank, the Export Development Bank of Iran (EDBI) and Sepah Bank were excluded from the approval.
Some 65 percent of the state insurance companies and the power generation and transmission firm except for Marzaki (central) Insurance Company and the national grid networks will be ceded to the private or cooperatives sectors.
65 percent of the shares of post and telecom firms except for the main telecom networks, telecom frequency affairs and administration of the post affairs will also be ceded to the private and cooperatives sectors.
Also 65 percent of the airlines and state shipping firm will be sold to the private and cooperatives except for the Civil Aviation Organization and the Ports and Shipping Organization.
Meanwhile, International credit agencies were accused of being discriminatory against Iran for downgrading the country's ratings at an economic conference in London last month.
Vice Governor of the Central Bank of Iran Mohammed Jafar Mojarrad said that he was "troubled by the credit ratings" and suggested that it was "due to political grounds" rather than for any financial reasons.
He was supported at the conference on Wednesday by the managing director of Melli Bank in London Ahmad Azizi, who said that Iran's rating of B+ "does not reflect the realities of Iran's economy."
The accusation followed a presentation by James McCormack, senior director of Fitch, who insisted that the low standing attributed to Iran was "not just politics."
McCormack tried to justify the ratings, which puts Iran below such countries as Azerbaijan and Kazakhstan, by questioning why Tehran was able to attract so little foreign investment.
He was supported by the deputy chief executive of the British government's Export Credit Guarantee Department, John Weiss, who said that the structure of Iran's economy was "weak."
Presentations to the conference on 'Fuelling Economic Growth in Iran' praised Iran's management of its debt, while recognizing that they were among the lowest in the world as a percentage of GDP and that the country's standing was as a net creditor.
... Payvand News - 12/19/04 ... --