Iran Central Bank takes measures to curb liquidity growth
Azerbaijan, Baku, Jan. 27 / Trend F.Mehdi/
The Central Bank of Iran has taken measures to curb the current rate of liquidity growth, the Fars News Agency quoted Kourosh Parvizian, the advisor to the Central Bank governor, as saying.
Through issuing bonds and not opening new LCs, the current liquidity growth rate will be restricted to 22-23 percent, he said.
On Jan.15, the Mehr news agency quoted Central Bank Governor Mahmoud Bahmani as saying that liquidity in Iran has reached 4,240 trillion rials (over $338 billion).
Liquidity has grown by 22.1 percent compared to the earlier announced figure, he stated.
The Central Bank previously reported that liquidity has grown over five folds since seven years ago.
Bahmani said in May 2012 that the liquidity growth rate fell to 19.4 percent in the past year, which ended on March 19, 2012, compared to 25.2 percent in preceding year.
Head of Parliamentary Economic Committee Gholamreza Mesbahi Moqaddam has said the subsidy reform plan put into place by the government has created $13 billion more in liquidity than was anticipated.
But, President Mahmoud Ahmadinejad has rejected such claims about the effect of implementing the subsidy reform plan in increasing liquidity.
The subsidy reform plan pays $37 to Iranians, eliminating subsidies for fuels and some commodities.
"When the plan started in December 2010, liquidity was expected to stand at about $32 billion," Moqaddam said.
However, a greater demand for the cash subsidies and the government's debt to the Central Bank led to $45 billion in liquidity.