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Increasing liquidity may lead to 30% inflation in Iran

Business Materials 21 October 2018 20:52 (UTC +04:00)

Baku, Azerbaijan, Oct.21

By Elnur Baghishov - Trend:

The liquidity in Iran’s banking system has increased by 3.5 times over the last five years, said deputy head of Iran Chamber of Commerce, Industries, Mines and Agriculture Pedram Soltani.

In other words, the liquidity in the country’s banking system has reached its maximum, but this hasn’t ensured development, ILNA news agency quoted him as saying.

Soltani noted that the country’s banking system was underdeveloped in 2015, however the liquidity was higher, because the Central Bank has issued licenses to the enterprises, which didn’t have operation permit, thereby increasing the liquidity. This situation has paved way for financial instability, he added.

“If this process continues, Iran will face a 30 percent inflation. At the same time, the financial problems of the enterprises, which do not have licenses, are solved by the Central Bank and citizens, which also leads to increased liquidity.”

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