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Iran in sovereign rating talks, wants to recoup oil market share
March 9, 2016 / 11:29 AM / 2 years ago

Iran in sovereign rating talks, wants to recoup oil market share

LONDON (Reuters) - Iran is in discussions about getting a sovereign credit rating and will need to regain its pre-sanctions oil market share before joining any talks on production cuts, the chief of staff to President Hassan Rouhani said on Wednesday.

Mohammad Nahavandian Chief of Staff of Iran Presidency attends the session "Next Steps for Iran and the World" during the Annual Meeting 2016 of the World Economic Forum (WEF) in Davos, Switzerland January 20, 2016. REUTERS/Ruben Sprich

Mohammad Nahavandian declined to comment on the test-firing on Wednesday of two missiles that Iran’s Islamic Revolutionary Guards Corps said were designed to be able to hit Israel, defying a threat of new sanctions from the United States.

A credit rating is seen as a necessary first step for Iran to be able borrow on international capital markets as its economy recovers from years of international sanctions.

“We are in negotiations with some of these rating agencies,” Nahavandian told Reuters on the sidelines of an Financial Times Iran Conference, replying “yes” when asked whether he expected the agencies to provide a full credit rating.

A collapse in the price of oil since mid-2014 has led some big exporters to suggest an output freeze, but Nahavandian reiterated that Iran, whose crude reserves are among the world’s largest, would be increasing its production in the near-term.

“Iran has to go back to its market share, there is no doubt about that. If there is any decision to be made (on cutting production) it has to be made by those who have filled the vacuum after the Iran sanctions,” he said.

“So Iran has to go back to the footing it used to enjoy, then (it) will join the group (of producers considering a freeze on output).”

Nahavandian said Iran’s central bank would continue to keep a tight grip on the amount of money circulating in the economy as it tries to bring down inflation that was recently as high as 30 percent, sapping spending power in the country.

“Stopping the undue increase of liquidity and strong money (supply) was the policy (of the last couple of years) and that will continue,” Nahavandian said.

“But at the same time on the fiscal policy side also, the government has managed to discipline itself to borrow from the central bank and not to rely on oil at the same time.”

Editing by Karin Strohecker and Catherine Evans

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