Monetary and Credit Policies in 1386 (2007/08)

Monetary Policies Approved by the Money and Credit Council


1. The Money and Credit Council (MCC) approved the following policy decision on Ordibehesht 1st, 1386 (1):

a. Due to high liquidity growth during the previous year and the ensuing inflationary pressures, the CBI is authorized to issue up to Rls. 40 trillion tax-exempted participation papers (substituted and the new ones) at the provisional profit rate of 15.5 percent.

2. The Money and Credit Council (MCC) approved the following policy decisions on Khordad 26th, 1386 (2):

a. The rate of return on the facilities extended by public banks for transaction contracts, such as hire purchase, installment sale and debt purchase, is determined at 12 percent (upon the date of communication of this approval).

b. The rate of return on private banks and non-bank credit institutions' facilities for transaction contracts is determined at one percentage point higher than that of public banks (upon the date of communication of this approval).

c. The minimum expected rate of return on the facilities extended for Profit and Loss Sharing (PLS) contracts by banks (both public and private) and non-bank credit institutions is determined at the rates set for transaction contracts. Moreover, the real profit rate of Profit and Loss Sharing contracts shall be determined at the end of the term of the contracts.

 

(1)April 21, 2007
(2)June 16, 2007

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