Iran calls for IMF emergency loan through INSTEX to circumvent US sanctions

Iran’s Central Bank has called on the IMF to expedite its request for a $5 billion loan, saying the funds can be transferred through INSTEX, the special purpose banking mechanism that facilitates trade between the EU and Iran to get around US sanctions.

Central Bank of Iran (‘CBI’) Governor, Abdolnaser Hemmati said his country needed the emergency loan to bolster an economy reeling under the impact of the Covid-19 pandemic, anaemic oil prices and tough US sanctions that closed off Tehran from international banking.

Hemmati, replying to written questions by Bloomberg, said he has told the IMF that a loan could be channeled directly into INSTEX.  The payment gateway, he said, has the ‘proper safeguarding mechanisms in place to address all concerns, if any.’ Washington has said it intends to block the loan and insists that the sanctions do not hamper humanitarian trade.

Iran’s top banker added that the tough US sanctions, including Washington’s decision to add CBI to its sanctions blacklist in September 2019, prevent Iran from accessing its own money in banks abroad, which he said would be ‘more than enough’ to cover what Iran needs at this time.

‘Central Bank reserves are under US sanctions overseas, which is illegal and unilateral, and I want to be clear about this,’ Hemmati said. ‘What we are saying is that the sanctions should be lifted altogether.’