Interbank rate in Iran nears 19%

Business Materials 7 December 2016 19:51 (UTC +04:00)

Baku, Azerbaijan, Dec. 7

By Khalid Kazimov – Trend:

The interest rate charged on loans in Iran’s interbank lending market has reached 18.9 percent, an official with Central Bank of Iran (CBI) said.

Head of credit department at the CBI, Ali Asghar Mirmohammad Sadeqi has said that the interbank rate over the last Iranian calendar year (ended March 20, 2016) hit 29 percent which later dropped to 17 percent after the measures taken by the CBI, ISNA news agency reported.

However, the banks failed to keep operating within the expected rate due to their commitments and tasks on financing small and medium-sized businesses as well as health insurance, he noted.

On the other hand, some banks due to the default risks were incapable of offering lower rates, the official added.

Therefore, the average interbank rate in some cases surpassed 23 percent, he said.

This is while Iran’s Money and Credit Council (MCC) back in June cut down banking interest rates on loans made to borrowers from 22 percent to 18 percent.

The Money and Credit Council also approved an earlier decision by the country’s bankers to lower the deposit interest rates from 18 percent to 15 percent.

The decision to reduce the interest rates was carried out with an aim to give a boost to the country’s depressed economy followed by the administration’s triumph in lowering inflation rate in the country.