Further Rate Cuts Inevitable
Economy, Business And Markets

Further Rate Cuts Inevitable

A member of the Money and Credit Council said to overcome economic challenges, lowering interest rates would be inevitable.  Mohammad Reza Pourebrahimi whose council is the main monetary policymaker added that MCC members are determined to approve further rate cuts. He criticized banks for failing to implement rates set by the body.
Pourebrahimi who also serves on the Majlis Economic Commission said the Central Bank of Iran has promised to deliver to the council a comprehensive report on the current rates and prospects of further cuts. However, he criticized the CBI for putting off the decision saying it had slowed down the decision-making process of the regulating body.
The council in mid-November had required the central bank to present a report on the probable consequences of further rate cuts. The CBI-affiliated MCC cut interest rates once in April by two percentage points, bringing deposit rates to 20%.
“The report will help MCC members to design a strategy to lower the rates in a gradual manner. In order for the cut(s) to materialize, the CBI should monitor the banks closely,” the news website banker.ir quoted him as saying.
MCC members are unanimous in supporting further rate cuts but differ in their approach to implement the scheme, according to Pourebrahimi. He also stressed the importance of attention to the parallel investment markets at the same time that the rates are reduced. “If we can convince the people to move their money to other investment markets we can be successful in our plans.”
The lawmaker opined that the current 20% deposit rates have a direct effect on banks’ lending rates which are at or near 24%. “A major part of the extended woes of manufactures is due to the credit crunch caused by the exorbitant lending rates of banks. The issue must be settled to enable the economy get back on its feet.”

Short URL : http://goo.gl/UklIWq
  1. http://goo.gl/sM2zOS
  • http://goo.gl/xUANND
  • http://goo.gl/UWcvMm
  • http://goo.gl/DqLYA1
  • http://goo.gl/inrk7d

You can also read ...

Iran's Economic Ties With Qatar Booming, Exports Up 117%
Iran exported $139 million worth of non-oil goods to Qatar...
China relies on oil imports from Iran while Tehran looks to Beijing for investment.
The value of Iran's exports to China during the nine months to...
Representatives of the chambers of commerce of Tehran and Vienna attended a joint event in Austria’s capital Vienna.
At a joint event attended by the 36-strong delegation from...
No Problem With Plane Deal Financing
Iran does not have a problem obtaining financing for its...
Tehran, Kiev Discuss Upgrading Aviation Ties
Head of the Iranian Parliament’s National Security and Foreign...
No Restrictions on Bank Sepah’s German Operations
Bank Sepah, the oldest Iranian bank, has denied reports in the...
Exports to Europe  Rise 107%
The value of Iran’s exports to the European Union from January...
Yazd Earns $10m in 7 Months
Close to 1.24 million tons of goods worth over $10 million...