Iran to is­sue cer­tifi­cates of de­posit in eu­ros to curb liq­uid­ity

Iran Daily - - Domestic Economy -

The Cen­tral Bank of Iran (CBI) is plan­ning to is­sue cer­tifi­cates of de­posit in eu­ros as it strug­gles to con­tain liq­uid­ity and tame the ris­ing in­fla­tion in the coun­try.

CBI Gover­nor Ab­dol­naser Hem­mati said that the cer­tifi­cates will be is­sued af­ter ob­tain­ing the re­quired ap­proval from Iran’s Money and Credit Coun­cil, Press TV re­ported.

Hem­mati did not elab­o­rate on the in­ter­est rate and ma­tu­rity date of the new debt in­stru­ments although sim­i­lar cer­tifi­cates of de­posit is­sued by the CBI and other Ira­nian banks nor­mally ma­ture af­ter one year and have a yield of more than 20 per­cent.

He said is­su­ing the cer­tifi­cates would be in line with CBI’S cur­rent pro­grams to man­age liq­uid­ity and con­trol in­fla­tion around a tar­get of 22 per­cent.

Hem­mati said the CBI would rely on its “abun­dant euro re­serves” to pay the yields and prin­ci­pal of the cer­tifi­cates of de­posit at their ma­tu­rity dates.

The plan comes sev­eral days af­ter the CBI an­nounced it would raise the in­ter­est rate on de­posits in the in­ter­bank mar­ket from 10 per­cent to 12 per­cent.

It also comes amid ef­forts to calm a for­eign ex­change mar­ket in which prices of in­ter­na­tional cur­ren­cies have soared to record highs.

The CBI has been us­ing the euro in­stead of the dol­lar as its bench­mark for­eign cur­rency since the United States im­posed a se­ries of sanc­tions on Iran in 2018.


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