The Money and Credit Council on late Tuesday ratified a government plan of action to check the growing recession and stimulate growth.
MCC members gave a nod to Central Bank of Iran's involvement in interbank market and financing manufactures, as part of the government's economic plan to simulate economic growth and lift the sagging manufacturing sector, the CBI website reported.
A the weekend the government unveiled a rare incentive package valid for six months to help improve demand for consumer goods, including new cars, and give some breathing space to domestic manufacturing units suffocating under sliding demand and rising inventories. The move, however, had a mixed reaction with many questioning the positive impact and efficacy of the move given the declining purchasing power of the masses, especially fixed-wage earners.
The council demanded the CBI open 7-year credit lines and invest in interbank market to curb the inflation rate, cut interest rates and address the liquidity shortage crisis of banks, especially state-owned lenders.
It also agreed to the decrease in the reserve requirement rations of banks and credit institutions. The rate varies between 10-13% based on each bank's quarterly performance.
Addressing the extended recession in the key housing sector, members of the council agreed to increase housing loans to 600 million ($20,000) rials in Tehran, and 500 and 400 million rials respectively for homebuyers in other major cities and towns.
To promote quality production, MCC ordered lenders to lend manufactures at 16% to help sell their unsold products in installments, while the CBI would finance banks at 14%.
The council that is affiliated to the CBI, approved issuing credit cards worth 100 million rials ($3,300) to clients with verifiable high incomes or fixed salaries.
To help improve competitiveness in the financial market, the council passed a directive to promote business lending. The directive allows payment of loans to manufactures in the form of credit in their current accounts with banks.
