Iran plans to regulate its banking system

Finance Materials 15 August 2022 14:15 (UTC +04:00)
Iran plans to regulate its banking system

TEHRAN, Iran, August 15. The Iranian government is trying to regulate the country's banking system and the Ministry of Economic Affairs and Finances is planning to control banks' balance sheets, an economic expert and the Dean of Faculty of Economics at Kharazmi University Vahid Shaghaghi told Trend.

Control over an unbalanced banking system could relatively reduce growth in the inflation rate, he said adding that it is necessary that the parliament and the Plan and Budget Organization solve the issue of an unbalanced budget or change the reform budget structure.

He pointed out that if Iran's oil export revenue increases the budget deficit for the next Iranian year (starts March 21, 2023) will be partly resolved but the issue of an unbalanced budget system remains.

The Central Bank of Iran and the Ministry of Economic Affairs will hopefully succeed in establishing a regulated banking system, he indicated adding that a possible deal in the nuclear negotiations could also solve Iran's unbalanced trade and even solve the budget deficit issue.

The expert stressed that the government and the parliament should solve four issues that led to the growing inflation rate that is unbalanced budget, an unbalanced banking system, unbalanced trade, and unbalanced pension funds.

Underling Iran's growing old population, the expert indicated that unbalanced pension funds will become more intense and worrisome in the future highlighting that the government should spend 50 percent of its revenues to solve the unbalanced pension funds.

It is possible that due to the lack of government investment the country would face more issues such as unbalanced energy, water, and electricity, he warned.