Iran’s top lender allows banks to issue 23% deposit certificate
The Central Bank of Iran (CBI) has allowed domestic lenders to issue high-yield certificates of deposit (CD), a move that experts say is a prelude to increasing interest rates with the purpose of controlling inflation in the country.
A spokesman said in a tweet on Saturday that CBI’s board of directors had authorized banks in Iran to issue CDs with a yield rate of 23%, adding that more details of the decision will be published on CBI’s website later in the day.
The announcement came a day after figures by the Iranian government’s statistics agency (SCI) showed that the country’s annual inflation rate had risen by one percentage point to 45% in the calendar month to late December.
Foreign currency and gold prices have also risen to all-time highs in Iran, prompting criticism of the CBI and other financial departments of the government.
Economic news website Eghtesadnews said in a report that allowing the issuance of high-yield CDs by banks would be a prelude to increasing interest rates in Iran, a policy which could tame inflation.
Iran has some of the highest interest rates in the world with current rates being between 18% and 20%.
The EcoIran economic website had reported earlier this month about CBI plans to increase interest rate by up to five percentage points.
In a news conference held earlier this week, CBI governor Ali Salehabadi said the lender would follow internationally accepted patterns in raising interest rates.
Iran’s finance minister Ehsan Khandouzi had also announced plans by Iran’s High Council of Money and Credit for changing interest rates in the country.
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