Workers load cargo on to a dhow at Dubai Creek. Image Credit: Javed Nawab/Gulf News

Dubai: Higher offtake of goods from the UAE to Iran will depend on the stance of local banks on opening letters of credit, say trade sources.

“Banks will be circumspect for a while and initially deal only with the highest-rated counter-parties,” according to one industry source.

“But there is a long history of cross-border business… so there is familiarity as well. This could mean that the initial period of hesitation should, hopefully, be short-lived.”

Apart from what banks are likely to do, the other issue that will have a bearing on offtake of goods from the UAE will be the credit periods that Iranian importers will want.

If they insist on too long a payment period, said the source, it could mean UAE businesses may turn cautious.