EghtesadOnline: In a performance report covering the period since the current fiscal year began in March 2017, the Central Bank of Iran has reviewed its major monetary policies related to reducing bank interest rates, boosting production and empowering people’s purchasing power.
On bank interest rates, the regulator first notes that it has continuously and meaningfully decreased interbank interest rates from 23.2% some four years ago to 18.6% last year.
The rate stood at 18.1% in the ninth month of the current fiscal year to Dec. 21, CBI’s website reported.
The central bank refers to its efforts for curbing deposit rates that stood at 22% three years ago and were capped at 15% through a directive issued in September, Financial Tribune reported.
The directive changed the composition of deposits and tilted the scale in favor of long-term contracts, implying that banks have scored success as people now tend to keep their deposits with the banks for longer periods.
CBI notes that loan rates have also been reduced to 18% from the 22% registered three years ago.
The central bank points out that it has given top priority to supporting small- and medium-sized enterprises in light of their high potential for decreasing unemployment and boosting economic growth and welfare.
Providing working capital required by 10,000 SMEs, financing 6,000 unfinished projects with a progress of at least 60% and offering loans to renovate 5,000 businesses have been prioritized by the banking system, which CBI believes will be realized by allocating about 300 trillion rials ($6.56 billion) in loans by the end of the current year (March 20).
By Jan. 15, thousands of SMEs received about 276 trillion rials ($6.03 billion) in loans, according to the central bank.
In financing the housing sector and increasing the purchasing power of people, the central bank refers first and foremost to upping the ceiling of deposit-less loans to prospective homebuyers.
CBI then points to the significant reduction in the interest rates of Bank Maskan’s Housing Savings Account aimed at supporting first-time homebuyers, backing construction in distressed urban areas and employing housing bonds.