Syrian President Bashar Al-Assad on Wednesday signed a law ratifying a $1 billion credit line from top regional ally Iran, a day after it was approved by parliament, Reuters reported, citing Syria's state news agency SANA.
The agreement was between two state-owned banks, the Syrian Commercial Bank and Export Development Bank of Iran, the Syrian news agency said. Syria signed a previous $3.6 billion credit line with Iran in July 2013 which has been used up mostly for oil imports, bankers have said.
The new deal was signed on May and the money would be used for funding imports of goods and commodities and implementing projects, SANA said, without giving details.
Tehran's financial aid has been seen as pivotal to the Syrian government and the economy, which has shrunk by more than a half in the four years since the conflict erupted, researchers say.
Iran is a close ally of Assad and has provided him with military support during his fight against rebels trying to topple his regime.
Former Iranian President Mahmoud Ahmadinejad personally sanctioned the dispatch of officers from the Iranian Revolutionary Guards to Syria to fight alongside Assad’s troops. The Islamic Republic’s current President, Hassan Rouhani, has said Tehran will back Assad "until the end of the road".
Iran’s financial support for Syria comes despite the sanctions that have been imposed on it by the West, and would seem to back up experts who have warned that the current sanctions regime against Iran's nuclear program has not been tough enough to provide a deterrent to Iran, the leading state sponsor of terrorism.
In 2014 Iran saw a 3% growth in its GDP, and just last Monday Iranian officials announced that 13 tons of gold had been repatriated as part of sanctions relief, bringing the total in unfrozen assets since the November 2013 interim deal was signed to just under $12 billion.