The interbank interest rate decreased again / How long will the interbank interest decrease continue?

According to Tejarat News, according to the announcement central bank, the last interest rate of the interbank market at the end of last week, again decreased and reached 20.59%. In this way, the interbank profit decreased for the third consecutive week after reaching 21.31% at the end of July.

This is despite the fact that many economic experts believe that the decreasing trend of the interbank interest rate is mandatory and due to the pressure of stock market activists. Also, this action of the government and the central bank can have irreparable consequences for the economy in the long run. One of these consequences is the increase in the monetary base and the subsequent creation of chronic inflation. In addition, Iran’s banking system, which is not in good condition at the moment, will be affected by such a decision.

Will the reduction of interbank interest continue?

Even though in the past months, many stock exchanges considered the reduction of interbank interest as the solution to the chaotic situation of the stock market, there are experts who have a different opinion.

According to this group of stock market experts, the decrease in interbank interest will be temporary. Because the government and the central bank are not able to control the inflation resulting from this rate reduction and forcefully increase it. On the other hand, the increase in inflation resulting from this action can intensify the withdrawal of money from the stock trading cycle, which is troublesome in itself.

Movement against the direction of deposit interest and interbank interest

Successive drops in interbank interest rates, while in the past days we have seen an increase in the interest rate on deposits in some banks. Banks that have increased the interest on their deposits to 20% and even for larger deposits, pay interest up to 22%.

Ali Salehabadi, the head of the Central Bank, also did not deny the increase in bank deposit interest and announced that the Money and Credit Council has not yet reached a specific conclusion for the increase in deposit interest. In this way, the movement against the direction of interbank interest and deposit interest does not seem logical, and its continuation can harm the country’s economy.