Iran’s new Central Bank head changes his promise

Iran Materials 3 September 2013 17:25 (UTC +04:00)

Azerbaijan, Baku, September 3 /Trend, N. Umid

The new head of Iran's Central Bank Valiollah Seif has said that bank interest rates will not increase, Iranian State IRINN TV reported.

Iran's media outlets quoted Seif on August 25 as saying bank interest rate should be set proportional to the inflation rate.

He added that interest rates should be revised, so that it should be more than the inflation rate.

The annual interest rate for deposits was determined at 18 percent by the Money and Credit Council of Iran for the last solar year which ended in March 19, 2013 and has not been changed since.

In mid-July, Iranian Eghtesadonline portal reported that, the real interest rate for deposits in Iran is the lowest in the world by negative 13 percent.

The real interest rate is the lending interest rate adjusted for inflation as measured by the GDP deflator.

According to the report, Iran's inflation rate in the past year was 31 per cent, while deposit interest rate officially had been set at 18 percent.