“The CBI is following up the issue of lowering interest rates mainly by promoting stability in markets and supervising banks’ performance in the interbank market,” the parliament news agency quoted him as saying.
The highest monetary decision-making body – the Money and Credit Council – voted last month to lower lending rates by two percentage points. Earlier private banks voluntarily lowered their one-year deposit rates from 18% to 15%. Lending rates were also cut to 18%, from 21%. “Our investigation shows that some lenders are offering 1-2% higher interests on deposits,” Seif said, noting that the CBI will take the necessary measures to stop unruly practices in the banking network.
Floating Forex Rates
The senior banker said the central bank will unify foreign exchange rates by the end of the fiscal year in March 2017. “It is on top of our agenda.”
Iran was forced to revert to the controversial double exchange rate regime after nuclear-related sanctions unlashed turmoil in the forex market in 2011-12 in which the national currency lost almost 70% of its value within days, according to Financial Tribune.
The government and CBI officials have said they intend to introduce a “floating,” yet “managed” exchange rate regime.
The CBI has been focusing on stabilizing the forex market on the one hand, and gradually increase the official rate on the other, to bring the two rates closer.
The government is also imposing new limitations on the allocation of subsidized foreign currency mainly by cutting the number of goods eligible for subsidized hard currency.
Unification of forex rates is a crucial requirement for the reintegration of Iran into global banking system and payment networks. The private sector has also been calling for unification of forex rates mainly to eliminate rent-seeking in the market.