Iran’s central bank tightens monetary policy, interbank interest rate at 20.93%

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The file photo shows Iranian banknotes.

The Central Bank of Iran (CBI) raised its benchmark interbank interest rate again amid efforts by the lender to tighten monetary policy and help the government in its efforts to tame inflation.

A CBI statement covered in a report by the Fars news agency on Saturday said the bank had raised the interbank rate by 13 basis points to 20.93%.

It is the fourth time in a calendar month that the CBI has raised the interbank rate, a measure that affects loans to households and businesses.

Iran’s interbank interest rate was 20.65% at the end of August, down from the annual high of 21.31% recorded at the end of July.

The monetary policy tightening by the CBI comes as the Iranian government plans to control Iran’s annual inflation rate to levels of around 40%.

Iran’s consumer price index rose one percentage point in August to 41.5%, according to figures from Iran’s statistics agency.

Economists say Iran’s high but controlled inflation rate is mainly the result of continued US economic pressure as well as shutdowns and lockdowns caused by the coroanvirus pandemic over the past two years.

Iran’s finance ministry promised earlier this month that it would try to keep the interbank interest rate at levels below 21% to help businesses and manufacturers secure the cash flow they need.

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