Financial Tribune- Iranian banks have no plans to further lower interest rates until the end of the current fiscal year that ends on March 20.

Ali Asghar Mir-Mohammad Sadeqi, director of Central Bank of Iran�s Credit Department, said �lowering interest rates is unlikely until the end of the year, considering the current state of the economy and the banking sector�, CBI�s website quoted him as saying during a press conference on Wednesday.

Mir-Mohammad Sadeqi did not elaborate.

Back in June, CEOs of private and state-owned banks agreed to lower long-term deposit rates from 18% to 15% with short-term rates set at approximately 10%. Later, the Money and Credit Council approved the cut.

CBI Governor Valiollah Seif later announced that the central bank seeks single digit interest rates, approximately 2-3% higher than the inflation rate.

The central banker went on to elaborate on rates in the interbank market, saying that some of the government�s recent plans, including� financing SMEs and purchasing wheat at guaranteed prices, have put pressure on the banking system, resulting in a surge in interbank rates.

�Currently, the average interest rate at the interbank market stands at 18.9%,� he said, noting that CBI has managed to prevent higher rates in the market.

The interbank market funding rate had gradually declined from a record high of 29% at the beginning of March 2015 to 17 % early this year.

Mir-Mohammad Sadeqi also noted that MMC is set to review new proposals for mortgage schemes.

�The plans are developed in cooperation with the Ministry of Roads and Urban Development and Bank Maskan, the state-owned lender specialized in Housing sector. The CBI is firmly trying to boost the housing sector,� he said, adding that more details will be announced in the coming weeks.

Credit Cards

The official also elaborated on the current state of the credit card scheme by saying banks have issued 305,000 credit cards so far.

�Currently Bank Mellat, Bank Refah, Bank Melli Iran, Tejarat Bank, Bank Sepah, Post Bank of Iran, Ayandeh Bank, Shahr Bank, Ansar Bank, Parsian Bank, Middle East Bank and Bank Pasargad Iran are offering credit cards to customers,� Seif said.

The entire banking system was supposed to take part in the scheme.

Back in September, the Central Bank of Iran announced that banks will offer three types of credit cards: Golden with a limit of 500 million rials ($14,000 at market exchange rate), Silver with a limit of 300 million rials ($8,400) and Bronze with a ceiling of 100 million rials ($2,800), based on the applicants� creditworthiness measured by banks.

However, early reports indicated lenders� unwillingness to participate in the scheme due to consecutive rate cuts imposed on them by authorities in recent months, and a shortage of capital that has become a common source of problem for many banks in recent years.