Deputy minister of industry, mine and trade Mojtaba Khosrotaj supported the decision made by the Money and Credit Council on April 28 to put a 24 percent cap on lending rate from the previous 27-28 percent, saying it could help recover the manufacturing sector. The official believes the main problem with which the manufacturing sector is struggling with is the high production cost, which has lead to high inflation. “To curb inflation, production costs should be decreased first,” ISNA quoted him as saying. The recent decline in the lending rates is a non-inflationary decision, he said, since it will provide producers with lower-interest loans. That could help lower the prices as the cost of money and capital provision has reduced. He further touched upon the issue of cutting deposit rates (for one-year deposits) from 22 to 20 percent, saying that the ministry industry prefers lower rates. “If the government can further curb inflation,” he said, “I hope the interest rates would also be revised down further.” Inflation for the 12 months ending April 20 stood at 15.5 percent, according to the central bank.
