TEHRAN – The Central Bank of Iran (CBI) has approved a directive allowing the banks of the country to provide up to 100 trillion rials (about $200 million) of funding to support the stock market, IRNA reported.

The mentioned directive was approved on Tuesday, in a meeting of the CBI Supreme Council chaired by the CBI Governor Mohammadreza Farzin.

As reported, The CBI governor has urged the Securities and Exchange Organization (SEO) to consider the concerns of the shareholders when injecting these resources into the capital market and to plan in such a way that the funding has an effective role in the capital market.

Earlier this week, Farzin announced the CBI’s new measures for supporting the capital market.

Referring to the central bank's three new measures to support the stock market and small shareholders, the official said these plans are mainly focused on financing listed companies to accelerate their development.

“The first step is to guarantee 3.6 quadrillion rials (about $7.2 billion) of bonds of the operating banks to issue Riyal financing bonds to supply working capital to companies listed in the stock market,” Farzin said.

The official also mentioned the issuance of 2.0 billion euros of foreign currency sukuk bonds to support the development plans of listed companies active in the field of petrochemicals and mining as the second measure to support the stock market.

The third measure is to grant 1.5 billion euros in foreign currency loans to listed companies that have foreign exchange income and quick-return plans, in order to increase their exports, according to the CBI governor.

The head of Iran’s Securitas and Exchange Organization (SEO) Majid Eshqi has also said the country’s banks, major holdings and government organizations are going to collaborate in order to support the stock market.

Referring to the latest decisions made by the Supreme Council of the Stock Market, Eshqi said most of the measures that are going to be taken to support the market are focused on providing funding and capital via the Capital Market Development and Stabilization Fund (CMDSF), Tasnim News Agency reported.

“Such measures will be taken by holdings and investment companies in order to reassure shareholders about the future of their shares”, the official said.

EF/MA