“Based on the new order, banks can pay more interest to customers than announced [central bank] rates,” says Tahmasb Mazaheri, governor of the Central Bank of Iran, in a statement from the official IRNA news agency.

Bank deposit rates in Iran are lower than the official inflation rate. This has encouraged savers to keep their money out of the banking system, which is one explanation for Tehran’s booming real estate market in recent years and the high rate of inflation.

The central bank governor and President Mahmoud Ahmadinejad have repeatedly clashed over the price controls on banking products.

Mazaheri did not say when banks would begin to increase their deposit rates.