Iranian media report that public and private banks have agreed to reduce interest rates by two percent.
The Coordinating Council of Public and Private banks announced that the interest on a one-year deposit will be reduced to 18 percent from 20 percent.
This is the second time interest rates have been reduced in the past six months.
The government of President Hassan Rohani has been taking a number of initiatives in recent weeks to stimulate the declining economy.
Lower interest rates are aimed at encouraging loan acquisitions and stimulating economic activity. This week, the government also announced incentives promoting domestic auto purchases.