Financial Tribune - In bid to further narrow the rate spread in the interest rate corridor (IRC) the Central Bank of Iran announced that it would raise rates on interbank deposits by 1 percentage points to 13% starting today (Saturday).

This comes after almost a week since the CBI increased the rate at which central bank takes deposits from banks, from the previously 10% to 12% now.

The development is in line with CBI monetary policy to control inflation through open market operation and the IRC.

IRC is a system for guiding short-term market interest rates towards the central bank target/policy rate. It consists of a rate at which the central bank lends to banks (typically an overnight lending rate) and a rate at which it takes deposits from them (deposit rate).