A recent report by the Central Bank of Iran indicates a 9.3% drop in the average lending rates in the interbank market during the previous fiscal year (ended in March). According to the CBI, the average interbank lending rates stood at 24.47% during the period.
According to published data, 23,031 deals were recorded in the interbank market in the previous fiscal year, up 32.6% compared with the year before. The total value of the deals also grew by 92.2% y-y.
The report also said that private banks accounted for 40.8% of lending in the market, charging other banks at 24.86% on average. State-owned banks and private banks respectively accounted for 30.8% and 27.1% of the loans paid in the interbank market. The CBI itself had a 1.1% share in market operations.
Private banks also top the list of borrower banks, as they received 74.3% of loans in the interbank market, during the previous fiscal year. Private lenders paid 24.9% interest on average.
Last week the CBI announced that the average lending rate in the interbank market was 18.7% from March 20 to September 11, confirming a relative rise had occurred. The announcement comes after rumor mills had it that interbank rates had jumped to as high as 24%.
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 had gradually declined from a record high of 29% at the beginning of March 2015 to 17 % early this year. The CBI has said it intends to influence bank interest rates indirectly through the interbank market rather than imposing caps through decree.
