Posted on 05/25/2007 8:01:59 AM PDT by Attention Surplus Disorder
TEHRAN: Iran's Press and economists yesterday slammed a decision by President Mahmoud Ahmadinejad to slash interest rates, describing the move as "incomprehensible" and risking "economic suicide".
The rate cut decision, which economists said could overheat an already inflationary economy, appeared to have been taken without the knowledge of economy minister who had said exactly the opposite just hours earlier.
"Economic suicide for banks," the Mardomsalari newspaper said of move.
"The economy minister and the head of the central bank have to explain this decision since this decree is incomprehensible for economists," the economy minister in the previous reformist government, Saeed Shirkavand, said.
The government spokesman said it was cutting state bank interest rates to 12 per cent from 14pc and rates at private banks to 12pc from 17pc in a bid to create fair competition between lenders.
"This ad-hoc decision will not benefit the investment market at all and will only terrify investors," the former head of the Tehran stock exchange Hossein Abdo Tabrizi told the Kargozaran newspaper.
"They will start to worry that maybe tomorrow there will be such decisions to control and create a price ceiling for shares," he said.
The centrist Ham Mihan daily said that hours before the decision was announced, both Economy Minister Davoud Danesh Jafari and central bank chief Ebrahim Sheibani said rates would stay the same.
"They were unaware that (the president) was pouring cold water on the economic commander of his cabinet in order to increase the temperature of Iran's economy," the daily said.
Ahmadinejad have been repeatedly criticised by the press for stoking already high inflation in the Islamic republic with high spending and promising lavish local investment projects on provincial tours.
However the president, who ran on a platform of distributing the country's riches more evenly, insists that inflation is under control and the government is doing all it can to reduce poverty.
They need someone like Burkananke over there.
The Third-Worldists Ahmadinejad, Chavez and Mugabe know how to ruin economies, despite having some of the richest lands on earth.
I’d be willing to send them Alan Greenspan but only if it included taking Andrea Mitchell as part of the package.
Aren’t they forbidden to charge interest? Or is that only between individuals?
I thought I read somewhere that Islam does not believe in charging interest for loans, etc..
Well that’s what happens when you’re crazy now doesn’t it?
That was my first reaction/question.
President Ahmaddy really is nuts. He thinks, apparently, that the higher inflation goes, the better it is for his countrymen.
Excuse my French, but what a putz!
“However the president, who ran on a platform of distributing the country’s riches more evenly, insists that inflation is under control and the government is doing all it can to reduce poverty.”
No wonder the Dems like this guy. They are philosophical twins.
Technically, they are but they use the term ‘rent’ instead. Sophmoric but
The Third-Worldists Ahmadinejad, Chavez and Mugabe know how to ruin economies, despite having some of the richest lands on earth.
::::
Socialists and dictators, all. They are very good at ruining anything they touch — so, now, who is going to vote socialist DemoRat in 2008? Is the USA next??
Murdering one another is their other great skill. They can’t wait to teach us how to do that.
Ain’t it funny how the islamo fundamentalists ignore a few things in their holy book when they get in the way of making a buck?
Seems they are picking and choosing selectively. They love those “kill the infidel” and “beat the women” parts but the rest just seems to get in the way of their fun.
“No wonder the Dems like this guy. They are philosophical twins.”
Excellent. I had the same thought as I was reading this. Looks like his history of how we won the cold war is as screwed up as the rest of his history.
Their unemployment rate is something like 30%. How can their economy be overheating?
Hey, maybe it’s related to mosque-starts and equivalent rents.
This among a hundred other things is only a reminder of how our calculus (not to mention our addition, subtraction, and string theory) flat out doesn’t work in that portion of the world.
Of course !
The poorer the populace, the more dependent they are on the government, and the angrier they are at the "infidels", that the government tells them, caused the situation..
You don't call it "interest". You call it the "vig".
Central banking types have no clue as to what causes inflation, either in Tehran or here in the US.
LOL!
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