TEHRAN, July 23 (MNA) – The Governor of the Central Bank of Iran (CBI) says a higher interest rate is the “logical and correct” policy to combat rising inflation.

The International Monetary Fund (IMF) in a report last week encouraged Iran to raise its interest rate and take other measures to slow down the country’s rate of inflation.
“Generally it contained good recommendations. I believe this recommendation is logical, correct, technical, expert and sympathetic,” Tahmasb Mazaheri told Reuters Monday when asked about the IMF’s call for higher rates.
“We hope to be able to do it,” he continued.
The CBI reported inflation reached 26.4 percent during the Iranian month of Khordad (ended June 20) compared with the same month last year.
Mazaheri acknowledged one of the causes of rising inflation is the growth of liquidity in the economy, although external factors such as rising energy and food prices are the main contributing factors.
“Inflation has different roots, one is high liquidity in the country,” he said. “One of the reasons for liquidity rate increase is the high oil price and exchange of oil income into our currency.”
The CBI has lowered the growth rate of liquidity to 27.7 percent compared with 35 percent a year earlier.
(Source: Press TV