Iran's Central Bank warns govt on withdrawing funds from National Development Fund
TEHRAN, Iran, Aug. 1
Governor of the Central Bank of Iran Abdolnasser Hemmati has warned about the government of withdrawing funds from the National Development Fund.
“Price increases this spring are not only related to the growth of the monetary base and liquidity,” Hemmati said in a statement on Instagram, Trend reports.
"The CBI spent some of the foreign exchange resources to counter the budget deficit,” he said, adding that in the short term, this would be like borrowing from the central bank.
“Therefore, the Central Bank had reported its expert opinion on the possible adverse effects of this method of financing,” he said.
Hemmati went on to say that the Central Bank has made every effort to control the growth of monetary variables in the medium and long term and to manage the interest rates to control inflation.
“The methods that the government has used this year to counter the budget deficit such as the offering of state owned companies` shares via the stock exchange and the issuance of bonds, are suitable methods to provide the necessary resources of liquidity,” he said.
“Not all price increases this spring are solely related to monetary base growth and liquidity,” Hemmati noted.
“Non-monetary factors and the role of other markets should not be underestimated in assessing the increasing inflationary pressures,” he said.