Baku, Azerbaijan, June 25
By Fatih Karimov - Trend: Iran's Money and Credit council set the one-year bank deposit profit rate at 22 percent.
The decision was taken following an agreement between representatives of state-run and private banks, Iran's Tasnim news agency reported on June 25.
The Central Bank of Iran has confirmed the profit rate.
On April 30, Abdolnasser Hemmati, Chairman of the coordination council of Iranian state-run banks, said that the banks reached agreement not to allow clientele to open accounts of over one year, Iran's IRNA news agency reported.
He added that the ceiling of bank interest rates was set at 22 per cent.
Some of financial institutions used to pay 27-28 per cent interest to long-term deposits. That had been contributed to an imbalance in the currency and housing markets, he explained.
In August 2013, the Central Bank of Iran (CBI) governor Valiollah Seif said that bank interest rate should be set proportional to the inflation rate.
He added that interest rates should be revised, so that they are less than the inflation rate.
The real interest rate for deposits in Iran is the lowest in the world by negative 13 per cent, Iranian Eghtesadonline portal reported.
The real interest rate is the lending interest rate adjusted for inflation as measured by the GDP deflator.