The monetary base has contracted for the first time in a decade, according to a top official with the Central Bank of Iran.
“Since President Hassan Rouhani took office in mid-2013, his administration has focused on curbing inflation through the monetary base,” said Hamid Tehranfar, deputy governor of the CBI for supervision affairs, ILNA reported. “In the light of the matter that the monetary base has recently contracted, the amount of deposits cannot logically increase as they used to.”
Speaking at the fifth conference of successful banking managers, the official said that increased deposits have always been the main criteria by which successful managers have been assessed, explaining that the expansion of the monetary base in the past years was the main reason behind the increase in the amount of deposits.
“Another reason why deposits won’t remain on the rise is that the CBI has also been trying to control money supply,” he said.
On the issue of interest rates on deposits and loans, Tehranfar referred to the recent instructions the Money and Credit Council on the issue, saying that some banks and credit institutions have not respected the instructions.
“Now interest rates have turned into a major problem and although most banking experts have been trying to turn the tide, their efforts have not yielded any significant results,” he added.
