37168
Financial Markets Don’t Worry About Rate Cuts
Economy, Business And Markets

Financial Markets Don’t Worry About Rate Cuts

The decision to cut interest rates from 20% to 18% was taken largely to help forge a balance between deposit/lending rates and other macroeconomic parameters, Peyman Ghorbani, the Central Bank of Iran’s deputy for economic affairs said.
“As a logical and informed decision, lower rates will not upset the balance in the asset markets,” he was quoted as saying by IRNA.
The CBI, as the policymaking body of the money market, considers many factors in setting interest rates, according to Ghorbani. He listed “volatility at macroeconomic level, decline in inflation, recession and balance in financial markets” as the main factors it takes into account when deciding rates.
Interest rates should be balanced with returns in business ventures in the real parts of economy. “Given that the inflation rate which is one of the factors determining profitability, high deposit rates cannot be defendable.”
Ghorbani pointed to the two-percent cut in deposit rate, from 20% to 18%, saying “considering the 6-7% gap between deposit rates and the inflation rate, deposit rates are still attractive for the people and should be lowered further.”
Inflation stood at a whopping 45% when President Rouhani took office in 2013. His government’s anti-inflationary policies and stringent economic discipline measures brought the figure down to 13%.
Ghorbani pointed to the capital market as one of the rival markets for bank deposits saying “Although the money market is risk-free, the CBI supports a flourishing capital market.”

 

 

Short URL : http://goo.gl/JvnaXD
  1. http://goo.gl/KfE2Le
  • http://goo.gl/fSCagg
  • http://goo.gl/pEcF0v
  • http://goo.gl/r5x6eY
  • http://goo.gl/TWVA9x

You can also read ...

US Won’t Block  European Trade  With Iran
US Secretary of State Rex Tillerson said the Trump...
A delegation headed by First Vice President Eshaq Jahangiri was in Ankara on Thursday and reached several deals.
Following several rounds of negotiations between Iranian and...
All SP Gas Field Phases to Be in Full Swing by March 2019
The South Pars mega project has registered a work-in-progress...
Evaluating Economic Impact of Shifting Iran-KRG Relations
Iran and the Iraqi Kurdistan Regional Government have...
Russia Grain Exports to Iran Reach 220K Tons
Over the first nine months of 2017, exports of Russian wheat,...
Iran’s Red Meat Output Meets 90% of Demand
A glance at Iran’s meat packing industry shows red meat...
Armenia Export Growth in Iran Tops 11%
Armenia has recorded an unprecedented growth in exports to...
Tehran Forex Market Experiencing Steady Days
After the recent rally that considerably pushed up the value...

Trending

Googleplus