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Is Rouhani’s economic team about to crack?

An escalating dispute between Iran’s Central Bank governor and the minister of economic affairs and finance is threatening to crack President Hassan Rouhani’s economic team.
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TEHRAN, Iran — A dispute between Ali Tayebnia, the Iranian minister of economic affairs and finance, and Valiollah Seif, the governor of the Central Bank of Iran (CBI), appears to be escalating over how to regulate Iran’s money market in the post-sanctions era. Seif, who has been criticized by conservative media for having been too lenient with the administration, is now coming under fire by fellow moderates for disobeying the Finance Ministry.

On June 6, Tayebnia reiterated his call for further cuts in interest rates, criticizing banks for poor lending practices and for offering “unreasonably high” interest on savings accounts. He also slammed commercial banks for “diverting” their resources to nonproductive sectors, implicitly blaming the CBI for failing to take its regulatory job seriously. The finance minister said he believes that small- and medium-size enterprises must be given priority in receiving loans from the banking system. Big business, he said, should be financed through the capital market, which has seen better returns since the Jan. 16 Implementation Day of the Joint Comprehensive Plan of Action (JCPOA).

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