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Relationship between Effective Rates on Deposits and Loans: The Role of Central Bank (in Persian)

Author

Listed:
  • jafari, akbar

    (payam noor university)

  • hesami azizi, bagher

    (payam noor university)

  • mehnatfar, yousef

    (mazandaran university)

Abstract

One of the main challenges of commercial banks in the recent years were the changes of interest rate and the rate of participation and exchange agreement by the central bank and incompatibility of inflation rate. The present research is about the relation between effective rates in active commercial banks of Iran with the test of “GRANJER” in the year of 1390-1394. In accordance of Islamic banking principles the interests’ rate is based on loan interest and the result of research shows the effective rate of loan interest in Iran banking system which is influenced by the effective rate of interest that is similar to the banking principles. Also it is based on the results that have not meaningful coherence between loan interests with approval rates of the central bank. On the other hand it can be stated that in the banking industry of Iran there is a strong reasonable relation from the interests’ rate. This result from the sight baking which based on supply sources from interests and its spend with cost money of interest rate in addition to banking profit, is rightly expected.

Suggested Citation

  • jafari, akbar & hesami azizi, bagher & mehnatfar, yousef, 2016. "Relationship between Effective Rates on Deposits and Loans: The Role of Central Bank (in Persian)," Journal of Monetary and Banking Research (فصلنامه پژوهش‌های پولی-بانکی), Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 9(28), pages 199-222, July.
    • Handle: RePEc:mbr:jmbres:v:9:y:2016:i:28:p:199-222
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    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O42 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Monetary Growth Models

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