Iran's interbank market interest rate has remained steady at
24% for the third consecutive week, reflecting continuity in monetary policy amid
ongoing exchange rate challenges. The Central Bank of Iran is maintaining this
policy rate despite pressure on the national currency and markets.
Iran's Interbank Rate Stability
Iran's interbank market rate held firm at 24% on October 9,
2025, marking the third consecutive week that this rate has remained unchanged.
This stable level aligns with the Central Bank of Iran's set policy rate and
signals a continued stance from the central monetary authority amid economic
challenges, according to a report by bne IntelliNews on October 9, 2025.
The Central Bank of Iran (CBI) has maintained this steady
rate as part of its broader monetary policy, aiming to balance liquidity and
credit demand within Iran's financial system. The interbank rate, which
reflects the cost banks charge each other for overnight loans, is a key
benchmark in guiding overall interest rates and lending conditions in Iran.
Overview of Monetary Policy and Exchange Rates
The Central Bank has also refrained from adjusting official
foreign exchange rates amid considerable volatility in the unofficial currency
markets. As noted by Econews in early October 2025, CBI Governor
Mohammad Reza Farzin has ruled out any plans to increase official exchange
rates so far. Instead, the bank plans major interventions in Tehran and Dubai's
unofficial currency markets to curb rising foreign exchange rates and stabilise
the Iranian rial.
Farzin emphasised the commitment to maintaining the preferential
official exchange rate until the end of the year while keeping foreign currency
reserves accessible, in light of depreciation pressures on the rial caused by
renewed sanctions and market fluctuations.
Foreign Exchange Market Context
There has been a sharp depreciation of approximately 26% in
the Iranian rial against the US dollar over recent months. On October 9, 2025,
the official exchange rate for the US dollar was set at 577,518 rials, while
the euro was priced at 670,299 rials, both representing slight decreases from
the previous day. Conversely, unofficial market rates remain significantly
higher, with $1 trading around 1.13 to 1.16 million rials and the euro around
1.31 to 1.34 million rials, reflecting persistent market distortions.
The introduction of the SANA system by the CBI has aimed to
rationalise currency exchange offices, while NIMA controls the sale of foreign
currency earned from exports. Despite these regulatory efforts, the unofficial
market continues to fluctuate, driving the central bank's intervention plans,
reported by Trend News Agency on October 9, 2025.
Historical Perspective on Iran's Interest Rates
Data from the Central Bank shows the standing lending rate
has remained unchanged at 24% since early 2025. Throughout the past few years,
the rate has fluctuated between a record low of 22% in January 2023 and the
current fixed level. The interbank market rate has similarly hovered around
24%, signalling an ongoing policy focus on monetary stability over rate
adjustments, as detailed by CEIC data in February 2025.
The Iranian banking sector is constrained by these
controlled rates, reflecting a policy environment aimed at balancing inflation
control with economic growth despite mounting external pressures.
Implications for the Iranian Economy
Although the interbank rate remains stable, economic
indicators suggest continuing challenges for Iran. The parliament recently
acknowledged deepening economic difficulties amid ongoing currency depreciation
and inflationary pressures, as reported by Farid Mahoutchi for NCR Iran on
October 8, 2025.
In line with these conditions, Iran has approved a monetary
reform set to remove four zeros from the national currency, a redenomination
initiative intended to streamline transactions and improve monetary stability
in the long term, Reuters reported on October 6, 2025.
Iran's interbank rate has held steady at 24% for the third successive week as the Central Bank maintains its monetary policy stance amid fluctuating and volatile currency markets. The bank's interventions in unofficial foreign exchange markets, along with efforts to support the rial, underscore the balancing act between stabilisation and economic pressures. The official exchange rate remains significantly divergent from black market rates, reflecting ongoing economic challenges for the country.