Governor of Central Bank of Iran promises to gradually get rid of chronic inflation
TEHRAN, Iran, May 30
Governor of Central Bank of Iran (CBI) announced the CBI's efforts to stabilize the foreign exchange market.
In a memo published on his Instagram account, Abdul Nasser Hemmati praised experts for providing constructive and useful opinions in order to achieve the targeted inflation, Trend reports.
“As Mr. President emphasized, financial discipline is an important condition for controlling inflation,” he said. “Offering state owned shares via stock exchange and issuing bonds are the government's right policies to reduce budget deficit.”
He added that these policies will help the central bank to closely monitor the growth of liquidity.
“Inflation is the result of the interactions of macroeconomic variables, such as interest rates, liquidity growth and government budget deficits,” he wrote. “The inflation, which means a steady rise in the price of the basket of goods and services in the economy, cannot increase or be reduced by an order.”
“Therefore, inflation can be reduced by changes in macroeconomic variables' policy, such as interest rates policy, or changes in open market operations, or changes in budget structure and deficit financing,” the CBI governor said.
“Inflation targeting is a modern monetary policy and a well-established strategy in the world's central banks over the past three decades,” Hemmati explained. “The Central Bank considers steps gradually get rid of chronic inflation.”
The central bank will maintain the stability of the foreign exchange market by closely monitoring the balance sheets of banks, he added.