EghtesadOnline: Since the inflation rate has continued to decline in the last four years, businesses expect the Central Bank of Iran to strictly monitor the implementation of the new CBI directive to lower interest rates, said the head of Iran Chamber of Commerce, Industries, Mines and Agriculture.
“One of the major problems pertaining to the banking network is lack of CBI supervision. The central bank should beef up its regulatory watch over banks’ performance,” Gholamhossein Shafei was also quoted as saying by ISNA.
Shafei’s comments reflect the fact that banks had defied the original decision by the Money and Credit Council last year to bring down the rates. Last year’s directive stipulated a maximum interest rate of 18% and a deposit rate of 15%.
Some lenders bypassed the rule by establishing various kinds of stock funds, some of which paid even up to 23% on long-term deposits, Financial Tribune reported.
As of April 30, 178 funds worth 1.3 quadrillion rials ($34.1 billion) had been launched.
During an open session of the parliament on Tuesday, Ali Motahhari, Majlis deputy speaker and a leading reformist figure, called on CBI to present a report on its supervision over banks’ performance, specifically on the implementation of the new directive.
According to the directive announced last week, banks and credit institutions are obligated as of September 2 to adhere to long- and short-term deposit rates set respectively at 15% and 10%.
Referring to a firm promise made by Economy Minister Masoud Karbasian to close the gap between foreign exchange official and open market rates, Shafei said, “The dual forex rates leads to abuse. There are other ways of allocating this subsidy to strategic goods.”
Iran currently uses two exchange rates: the free market rate, which stood at 38,610 rials to the US dollar on Tuesday and an official exchange rate for state transactions fixed by CBI at 33,160 rials the same day.