TEHRAN (FNA) Iran is to shake up its system of interest rates to take more account of rising inflation, officials said Sunday.
The economy minister and central bank chief were quoted as saying that interest rates at private and state banks should be set according to a rate dictated by the market.
“The rate of bank interest, its regulations and how to calculate the rate will be announced on March 5,” the head of central bank, Tahmasb Mazaheri, was quoted as saying by newspapers.
He did not say how the formula would be calculated, but indicated that banking interest rates had to be more in line with inflation.
“The bank interest and inflation rate are like the wings of a bird,” he said. “If we can move them together, we will decrease the rate of interest rates and inflation.”
“The market will determine bank interest rates,” Economy Minister Davoud Danesh Jafari was quoted as saying by the Etemad Melli newspaper. “This is a new vision in banking.”
Mazaheri, who took over at the central bank from Ebrahim Sheybani in September, is a technocrat who also served as economy minister during the reformist presidency of Mohammad Khatami.