Interest rate cut may help alternative markets in Iran: expert
Baku, Azerbaijan, Aug. 28
By Farhad Daneshvar – Trend:
It is not beyond the bounds of possibility that a recent decision by the Central Bank of Iran (CBI) on reducing interest rates could help alternative markets grow in future.
The CBI issued a new directive on Aug. 23 setting a deadline for banks to reduce their deposit interest rates to 15 percent.
"There is an obvious possibility that the directive could lead depositors to move to alternative markets," Bahaoddin Hosseini Hashemi, former CEO of Bank Saderat Iran, told Trend.
Investors normally show interest in those markets that are characterized by higher liquidity, like currency and gold markets as well as real estate and equity markets, he added.
According to the official news website of the Central Bank, the CBI has obliged the country’s banks and credit institutions to implement the directive as of September 2.
Under the directive, banks and credit institutions are obligated to adhere to long- and short-term deposit rates set respectively at 15 percent and 10 percent.
Hosseini Hashemi further added that the decision could also help Iranian banking system to minimize the risk of financial loss.