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Iran makes payments on old loans to World Bank

Agencies | Updated: 2013-09-28 07:36

WASHINGTON?- Iran resumed payments on old loans to the World Bank, the bank said on Friday, just as the country held the highest level conversation with the United States in more than three decades.

The poverty-fighting World Bank, which did not provide a reason for the resumption of payments, announced in July that Iran had not made any payments for more than half a year, a possible sign of the strain on the sanctions-hit Iranian economy.

At the time, Iran denied that it had failed to make payments on its loans, which now total $616 million, and blamed Western sanctions for preventing an intermediary from forwarding funds to the global lender.

All of the payments are for old loans, as Iran has not had a World Bank program since 2005. The Washington-based World Bank said it is in compliance with all U.N. and international sanctions against Iran.

It was not immediately clear why Iran had stopped making payments in July, according to the World Bank, and why it resumed them on Friday. World Bank spokesman David Theis had no further comment.

The World Bank announcement came just as U.S. President Barack Obama and new Iranian President Hassan Rouhani held a historic phone call, a sign that the estranged nations are serious about reaching an agreement on Tehran's nuclear program.

Obama said this was a unique opportunity to make progress with Iran over an issue that has isolated it from the West.

The United States and its allies have imposed hard-hitting sanctions against Iran's oil and banking sectors to choke off funding of a nuclear program which the West says is a drive to achieve a weapons capability. Iran says its nuclear program is entirely for peaceful purposes.

Rouhani, who was in New York for the U.N. General Assembly this week, urged an end to sanctions crippling Iran's economy and repeatedly stressed Iran's desire for normal relations with Western nations, while denying the country wanted a nuclear arsenal.

During the visit to New York, Rouhani also met with the head of the International Monetary Fund Christine Lagarde to discuss his government's economic policies and a way to deepen relations with the international institution.

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