Syrian President Bashar Al-Assad has signed a law ratifying a $1 billion credit loan from top regional ally Iran. The funds will help ease economic strains from the costly war, Syria’s state news agency SANA reported on Wednesday.
The agency said that the agreement was between two state-owned banks, the Syrian Commercial Bank and Export Development Bank of Iran.
Bankers said Syria signed a previous $3.6 billion credit loan with Iran in July 2013, which was mostly used for oil imports.
SANA said the deal was signed on 19 May and approved by the Syrian parliament on Tuesday.
The money will be used to fund the import of goods and commodities and implementing projects, it added, without giving details.
Researchers say that Iran’s financial aid has been vital to the Syrian government and the economy, which has shrunk by more than half in the four years since the conflict erupted.
Meanwhile, Syrian officials and businessmen said in May that Damascus was about to finalise details of a new credit facility. A Syrian official said at the time that the new credit loan would be used “to secure the flow of essential goods and materials” for Syria.
Syria’s economy has been hurt by a depletion of foreign reserves that were estimated at $16 -18 billion before the crisis. The country had been earning some $2.5 billion a year from oil exports before the war.