Economy, Business And Markets

New Economy, Industries Ministers Join MCC

New Economy, Industries Ministers Join MCC New Economy, Industries Ministers Join MCC

The first Money and Credit Council meeting after the commencement of President Hassan Rouhani’s second term convened late Tuesday with two new members joining the decision-making body responsible for setting the country’s banking and financial market regulations.   

According to the minutes of the meeting released by CBI on its website, Masoud Karbasian, the new minister of economic affairs and finance, and Mohammad Shariatmadari, the new minister of industries, mines and trade, were sworn-in as the new members representing the administration in the 14–strong committee.

Karbasian and Shariatmadari replaced Ali Tayyebnia and Mohammad Reza Nematzadeh, the two former ministers who served in Rouhani’s Cabinet from 2013–17.

At Tuesday’s meeting, the financial policymaking body headed by CBI Governor Valiollah Seif approved an amendment to the regulation, based on which foreigners can open rial bank accounts. MCC hopes that after the successful implementation of this regulation, more credit and banking services become available to foreign investors to capitalize on opportunities created in the post-sanctions era.

The Iranian government has set the goal of attracting foreign investments amounting to $70 billion envisioned in the Sixth Five-Year Development Plan (2017-22) to generate employment and boost domestic industries.

MCC also voted to extend the repayment period for academic and intellectual elite’s mortgage loans to 15 years. In May, CBI had raised the ceiling of housing loans for elites by 60% to encourage them to stay in the country.

The committee reiterated CBI’s position that lenders should adhere to official interest rates for long- and short-term deposits, which have been set at 15% and 10% respectively.

The Central Bank of Iran has repeatedly said that it intends to fix interest rates at approximately 2-3% higher than the inflation rate that was around 10.3% for the Iranian month ending July 22.

The council also discussed the performance of CBI regarding shadow banks. According to Seif, the monetary policymaker managed to “put an end to the activities of these institutions after two decades”.

On Saturday, in his meeting with top bankers, Seif revisited the issue of uncertified lenders and said three authorized lenders have acquired the last of uncertified credit institutions.

At the end, council members called for preventing the formation of more such illegal entities by ramping up CBI’s supervisory role as part of the Central Bank Bill–one of the twin bills sent to the parliament days ago for reforming the ailing banking system after more than four decades.

The monetary regulations of Sixth Plan designated members of the Money and Credit Council, which include the economy minister or his deputy, the CBI governor, two ministers chosen by the Cabinet and the head of Iran Chamber of Commerce, Industries, Mines and Agriculture, among others.

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