Iran Extends Financial Support To Syria, Approves $1B Credit Loan

Iran has extended financial support worth $1 billion to Syria. The credit loan will help the Syrian government ease economic problems caused by the ongoing war.

A law on the ratification of the credit loan was signed by Syrian President Bashar Assad. According to Syrian news agency SANA, two state-owned banks were involved in the deal: the Export Development Bank of Iran and the Syrian Commercial Bank.

Bankers said that Syria previously used credit loans from Iran. The earlier agreement, signed in July 2013, fetched $3.6 billion -- mostly used for oil imports. Reuters reported that the Syrian parliament only approved the new deal Tuesday, even though it was signed May 19.

Syria said in May that it was all set to finalize details of a fresh credit facility. According to officials, the credit loan was supposed to be used "to secure the flow of essential goods and materials" for Syria. The loan amount will be used to fund imports of commodities and goods. It will also be used for implementing projects, the Syrian news agency reported without giving any further details.

According to researchers, the war in Syria over the last four years has shrunk its economy by more than a half. The financial aid from Syria’s top ally is seen as a major boost for the Syrian economy.

Middle East Monitor reported that foreign reserves in Syria had been estimated at around $18 billion before the war. Syria used to earn around $2.5 billion annually from oil exports during those days.

Iranian President Hassan Rouhani has repeatedly expressed Tehran’s support for the Assad regime. He has previously said that his country will stand by Assad “until the end of the road.” It is believed that Iran has sent a number of military advisers to Syria. The conflict has killed several senior officers from the Iranian military in recent months.