The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Iran: Tehran moves toward an orthodoxy of finance

More flexibility in setting interest rates; Crackdown on non-performing loans

Iran’s central bank has sent local financial institutions a cheerful greeting for the Iranian New Year.

The regulator’s annual policy package, received by banks last month, will allow lenders to pay less interest on deposits and charge more for standard, so-called transaction loans. The loan-price increase comes despite inflation falling, according to the IMF, from about 30% in October 2008 to about 7.5% a year later. However, an economist in Tehran says inflation has been rising slowly again this year.

The consensus is that the regulator’s policies are designed to spur growth, which the IMF says was only 1.5% in 2009, and will be only about 2.2% in 2010 – compared with about 5.6% annually during the years before Lehman Brothers collapsed.

Reduced rates

Reducing rates for standard short-term deposits to 6% from 9% will encourage depositors to put money in longer-term accounts, and in the stock market, according to Ali Mashayekhi, head of research at local investment firm Turquoise. Longer-term deposits enable banks to maintain smaller cash reserves at the central bank.

Privately owned banks have become leaders in giving Islamic-style participation contracts, where individual banks can agree their own rates. Ahmad Taheri, chief executive of privately owned EN Bank, says the prevailing rate for such loans is still about 26%.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree