Iran Economy in Brief – No. 86

Banks under the Central Bank’s lens

One month after setting banking interest rates at 15%, and with strict monitoring by the Central Bank, the composition of deposits in banks has changed. In a report, the Governor of the Central Bank of Iran, Valiollah Seif said: “Prior to this scheme, short-term deposits held the upper hand in the composition of deposits in the banking system. After the scheme to reduce interest rates, the shares of short-term deposits from total non-governmental deposits in the banking system was reduced from approximately 36% to 25%. On the other hand, shares of one-year deposits increased from 34.5% to 45%.”

In the report, the Central bank also states that the number of special short-term deposits has risen. Special short-term deposits are those in which customers cannot access their deposits anywhere from 45 days to 6 months. These deposits currently make up around 11% of total deposits.

Related topic: Banking interest rate: a mystery to end?

Indians and Koreans on Iran’s rail projects

Iran is in talks to finalize two rail project investments with India and South Korea. Indian Ircon International signed an agreement to construct the 500 km Chabahar-Zahedan railway in May 2016. However due to slow progress, financing for this project expired in April 2017. This project requires at least 1.5 billion dollars in financing.

Another railway project for which Iran is seeking investors is the 600 km Isfahan-Ahwaz railway. This project requires 5 billion dollars in financing.

Read more about Rail Projects in Iran

Tehran Chamber of Commerce in London

The Tehran Chamber of Commerce Representative Office in London was inaugurated on Sunday. The objective behind establishing this office is easing foreign investment in Iran.

The Head of the Tehran Chamber of Commerce, Masoud Khansari said: “After the lifting of the nuclear sanctions, over 200 trade delegations visited Tehran. However, we must admit that enough practical and executive actions have not taken place. There are two serious problems in increasing trade relations with Europe. One problem is foreign; after the presidency of Donald Trump, problems and concerns for financial activists have increased. The second problem is domestic and due to other sanctions and mismanagement. These problems have led to issues in banking and financial systems within Iran.”