Iran banks cut de­posit rates af­ter sanc­tions lifted

The Pak Banker - - COMPANIES/BOSS -

Ira­nian com­mer­cial banks have agreed to cut their de­posit rates in a move wel­comed by the cen­tral bank, af­ter the lift­ing of eco­nomic sanc­tions on Tehran brought hopes for a fur­ther fall of in­fla­tion and faster eco­nomic growth.

The banks de­cided to cut their one-year de­posit rate from 20 per­cent to 18 per­cent, while the overnight de­posit rate will fall below 10 per­cent, the Fars news agency quoted Kourosh Parvizian, head of the As­so­ci­a­tion of Pri­vate Banks, as say­ing to­day.

De­posit rates soared above 20 per­cent dur­ing the sanc­tions era, when the rial cur­rency was weak and in­fla­tion was high, but au­thor­i­ties have started to guide them down to­wards more nor­mal lev­els now that the rial has sta­bilised.

Lower de­posit rates could en­cour­age the pub­lic to start spend­ing and in­vest­ing large amounts of money which were hoarded dur­ing the sanc­tions era, thus boost­ing eco­nomic growth, which is cur­rently near zero.

An­nual in­fla­tion has dropped to 13 per­cent from more than 40 per­cent three years ago and last month's lift­ing of sanc­tions, af­ter an in­ter­na­tional agree­ment on Iran's nu­clear pro­gramme, may fur­ther re­duce in­fla­tion­ary pres­sure.

The new de­posit rates will take ef­fect on Feb. 20 sub­ject to ap­proval by the gov­ern­ment­backed Money and Credit Coun­cil. In a state­ment, the cen­tral bank praised the de­ci­sion and said it would make sure the bod­ies that it su­per­vised im­ple­mented it.

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