Banks Neutral on Rate Decision

Iranian banks are reluctant to initiate interest rate cuts, the secretary-general of Private Banks and Credit Institutions Association said. “Banks do not have any plans to reduce interest rates [voluntarily],” Mohammad Reza Jamshidi was also quoted as saying by Tasnim News Agency.  He noted that since the Central bank of Iran did not heed the banks’ views concerning the issue, they have decided not to get involved in this matter. Noting that earlier banks made their views known only at the behest of CBI, Jamshidi said the Money and Credit Council, as the body in charge, has the final say on the issue. Back in June, CEOs of private and state-owned banks agreed to lower long-term deposit rates from 18% to 15% with short-term rates set at approximately 10%. However, the Central Bank of Iran had announced that it seeks to fix the interest rate approximately 2-3% higher than the inflation rate, which was around 10.3% for the Iranian month ending June 21.