Central Bank of Iran cuts interest rates to stem inflation

Iran's Central Bank said on Monday that cutting interest rates aims to channel liquidity to the manufacturing sector and stem inflation adding that it has adopted appropriate measures for management of market liquidity envisaged at 2,472 trillion tomans by the end of the Iranian year (March 2020).

CBI released an excerpt of Iran's economic figures on Monday in which it said market liquidity pertaining to the Iranian year 1398 (March 2019-March 2020) increased by 31.3 percent compared to the previous year and the plan to channel the financial resources to the industrial sector to stem inflation and create jobs.

The statistics also indicated that Iran's market liquidity in 1397 (March 2018-March 2019) amounted to 1,882 trillion tomans, up by 23.1 percent in comparison to the previous year.

CBI had previously said that the growth in last year's liquidity was due to oil sanctions pressure on the governmental budget and the increase in the Bank's external assets net value caused by purchasing 12 percent of National Development Fund's currencies.

In order to contain liquidity, CBI has adopted stricter policies, including preventing interest rate race among financial institutes, launching open market operation and reforming CBI's relationship with the Government's income/expenditure.

News Code 192021

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