Interest rates go up


The Iranian president, Mahmoud Ahmedinejad has been forced to raise interest rates on bank deposits. The rate rose on Wednesday to 21% from 15%.

The move has come after inflation reached 20.6% and buyers lost faith in the rial, instead turning to gold coins and the US Dollar. Last week the European Union placed an embargo on Iranian oil and petroleum products which will further squeeze the Iranian economy.

The rial stabilised with the news, but this may have been a temporary measure only.

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