Economy, Business And Markets

Impact of Lower Rates

Impact of Lower Rates Impact of Lower Rates

The chairman of Mehr Afarin brokerage firm says if interest rates are lowered to a certain degree, “we will witness a positive effect on the capital market and the production sectors”, but added thatrate cuts need to happen without official decrees.”Interest rates have come down from the 27-30% last year to around 20-22%,”Shahin Cheraghi told Eghtesad News, adding that this will certainly have an impact on the capital market, “but the rates need to reduce without official decrees for them to be truly effective.” Keeping that in mind, he noted, “the most important thing the government needs to do is to make the effects of lower inflation and interest ratesconspicuous for manufactures.  Despite the cut in interest rates, economic experts and market observers insist lending rates are still prohibitive, especially for the struggling production sectors saddled with high and rising bad debts.