The Central Bank of Iran (CBI) is acting to arrest the decline in the value of the Iranian rial which had fallen to record lows of close to $1=IR50,000 on the free market, more than 20% down on its value in mid-2017 of IR37,700. The CBI is taking measures in a bid to boost investment in the domestic industry, but its actions risk sparking inflation which would itself dampen private sector growth. The government is in a precarious situation with no good options.
CBI Governor Valiollah Seif at the end of last week announced that for a period of two weeks starting on 17 February “banks will be allowed to offer interest rates of up to 20% on fixed one-year deposits,” up from a previous deposit rate which was capped at 15% in September. (CONTINUED - 1091 WORDS)
