Economy, Business And Markets

CBI Confirms Increase in Interbank Lending Rates

CBI Confirms Increase in Interbank Lending RatesCBI Confirms Increase in Interbank Lending Rates

The average lending rate in the interbank market stood at 18.7% from March 20 to September 11, the Central Bank of Iran said Wednesday. “The interbank rate varied between 17–22% during the five months to August 20, down from the past year when it fluctuated between 24–30%.”

The announcement comes after rumor mills had that interbank rates had jumped to 24%. During the said period an average of 100 interbank deals were conducted among banks on a daily basis, worth 124.2 trillion rials ($3.9 billion), a 35% growth in volume and 87.9% in value.

 By active intervention in the interbank market, the CBI has been trying to restore calm to the market and tackle the expanding credit crunch. As a result, the interbank market funding rate gradually declined from a record high of 29 % at the beginning of March 2015 to 17 % early this year.

The CBI had cited its intervention in the interbank as the main reason it succeeded in bringing down bank interest rates without resorting to its official decrees, as had been the controversial practice for decades.