Baku, Azerbaijan, Feb. 15
By Farhad Daneshvar - Trend:
Iranian banks have agreed to reduce the interest rate as of Feb. 20.
At a meeting on Feb. 15 morning, the bankers decided to cut the annual interest rate by two percent, dropping from 20 to 18 percent, while the daily interest rate will fall below 10 percent, ISNA news agency reported.
Iranian experts suggest that the drop in the interest rates would help the country's stock exchange to surge, bringing billions of Iranian rials into stocks.
Although the Tehran Stock Exchange (TSE) main index has rocketed since Jan. 16 after the removal of international sanctions, the market remains volatile.
The TSE main index surged by 3,800 points to hit 77,497 over the last week, indicating a 5-percent growth.
Iranian banks increased the interest rates during the sanctions years as inflation was at its highest level. Before President Hassan Rouhani took office in 2013, inflation was over 40 percent.
A recent IMF report estimates that Iran's real GDP growth is projected to accelerate to 4-5.5 percent in 2016/2017 and to average 4 percent throughout the medium term.
The report forecasted that the country's inflation will fall to 11.8 percent in 2016 and 10.5 percent in 2017.
Iran plans to register an economic growth of 8 percent according to a five year plan that will begin in March 2017.