Baku, Azerbaijan, May 5
By Fatih Karimov - Trend: The Central Bank of Iran has given the right to banks for setting the interest rate for less-than-a-year accounts, said Peiman Qorbani, the deputy governor of the Central Bank of Iran.
Banks can set the interest rate for less-than-a-year accounts proportional to the competitive market rates, Iran 's IRNA news agency quoted Qorbani as saying May 5.
The Central Bank has officially announced the new interest rates and they will be applied as of May 6.
Qorbani added that the new decision would increase productivity of the banking system and reduce costs.
Iran's Money and Credit Council has agreed to reduce the one-year deposit interest rate by 2 percent, settling it at 20 percent, and the exchange contract interest rate by 1 percent, settling it at 21 percent. The council also set the expected interest rate for partnership contracts at 24 percent.
The reduction of penalty rates for overdraft facilities duties was another amendment passed by the council. Also, legal deposits interest rate was lowered by 0.5 percent to 13 percent.
A December report by the Central Bank of Iran said that bank deposits in Iran hit 7,810 trillion rials (approximately $270 billion).
The total domestic and foreign-currency deposits added up to 7,809.82 trillion rials for that time. As legal deposits were deducted and the deposits were laid by the Central Bank, about 6.94 trillion rials stayed with the banks.
Edited by CN