Reforming Iran’s banking system, whose representatives have been grappling with a variety of issues

In his first televised interview since being inaugurated for a second term, Iranian President Hassan Rouhani talked about the  banking system and attracting foreign investment among other things and outlined what his administration plans to do in its second term that started this month.

The President said, “Core decisions on the economic issues that the government is facing will be taken at a Coordinating Council meeting while some might be referred to the Council of Economy or come to the Council of Ministers.

He went on to say that each member of his cabinet is legally entitled to make individual decision makings, except a series of fundamental decisions on economy that require accreditation from upper levels in charge that the President himself will attend to them.

President Rouhani said: “We evaluate the ministers’ performance every three months. I have also instructed the Planning and Budget Organization to conduct a carefully prepared disclosure analysis on any entity that has been authorized to access public funds.”

On the international front, the president expressed satisfaction with regard to foreign investment, noting that since the nuclear agreement some $13-Billion-worth foreign investment in the country.

Referring to CBI’s plans to allocate $7.7 Billion in loans to small- and medium-sized enterprises to assist production and boost job creation, he said, “We have to overhaul the economy.”

President Rouhani added support for SMEs holds significance, especially since the administration needs to create close to a million jobs during the current fiscal year ending in March 2018, saying “The role of banks in this regard will be great.”

But for lenders - to be able to support production - they will need backing from the administration since, as the president noted, “Their primary problem is that they are low on capital, so we need to boost their capital”.

The Chief Executive then referred to high interest rates as “the big dilemma of our economy”, asking how “investors can stay afloat when the interests on their loans are up to 20%”.

Rouhani pointed out that the inflation rate stands below 8% for the current month, which would render interest rates of around 11% acceptable.

“[A difference of] two to three percentage points between deposit rates and interest rates will be agreeable,” he added, meaning that his target for interest rate would be about 14%.

Release Date: 9/5/2017

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