...

Iran increases bank interests to control liquidity

Business Materials 3 June 2011 12:36 (UTC +04:00)

Azerbaijan , Baku, June 3 / Trend/

The Central Bank of Iran (CBI) would increase bank interests to control liquidity, ISNA reported quoting the CBI's Governor Mahmoud Bahmani as saying.

"The CBI will increase interest rate of long term investment deposits and submit its report to Iran's Money Council," he said.

Type of deposit

Previous interest rate (%)

Current interest rate (%)

Short term

6

6

Short term (4 months)

8

6

Short term (6 months)

11

8

Long term (a year)

14

12.5

Long term (2 years)

14.5

13

Long term (3 years)

15

13.5

Long term (4 years)

16

14.5

Long term (5 years)

17

15

By increasing the bank interests, people prefer to keep the liquidity at banks. The CBI aims to gather liquidity to reduce prices on market and to halt rising inflation ratio.

Cut in supply of foreign currency on markets has resulted in increase of dollar rate and gold coin prices on the market.

During the past six solar years (end March 20, 2011) Iran's liquidity has increased four times to $300 billion.

"If banks can attract more liquidity by increase of interest rate there would be no rise of inflation in agricultural, industrial and economical sectors," he said.

Tags:
Latest

Latest