CBI: No Rise in Interbank Rates

The Central Bank of Iran has denied recent reports that put the interbank lending rate at 26%, stressing that its average is considerably lower.

"The average for interbank rates stands at 18.9%, and the 26% rate reported by media outlets is not accurate," Peyman Qorbani, CBI's deputy for economic affairs, told ILNA.

Noting that the interbank interest rates currently range from 17-24%, he reiterated that in the current month, the average has been 18.9%.

"Banks may also choose to consider various rates between these figures for different parties," he said.

The official said CBI has balanced the bank interest rates in several stages and this was in line with changes in the inflation rate, which was brought down to single-digits in the past few months after more than two decades, and  in accordance with the "the general conditions of the country".

Qorbani added that deciding the interest rates and having supervision over them are very important for the central bank.

"What has happened is that in the past three years, the inflation rate declined and therefore the banking system has been trying to lower the interest rates," he said.

In line with this, he said, the Money and Credit Council and CBI made suggestions to banks, which then led to a gradual decline in rates. 

"The banks are now adhering to the approved rates better, but there might also be violations in a number of them, which will be dealt with," he said.

Back in June, CEOs of private and state-owned banks agreed to lower long-term deposit rates from 18-15% with short-term rates set at approximately 10%. MCC approved the cut. On further rate cuts, Qorbani said the matter is not just dependant on inflation rate.

"In addition to the inflation rate, the overall conditions of the banking system and other financial assets must be taken into account," he said.