Iran’s liquidity growth hit 22%

Business Materials 19 May 2015 13:31 (UTC +04:00)

Baku, Azerbaijan, May 19

By Fatih Karimov - Trend: Iran's liquidity grew by 22.3 percent in the past Iranian fiscal year, which ended on March 20, the Central Bank of Iran said in a report May 19.

The volume of liquidity amounted to $280 billion in the previous fiscal year.

The liquidity growth had projected to be within 23-25 percent, according to the report.

Moreover, the banking system paid $120 billion in loans in the past fiscal year, a 44.5 percent rise year on year.

The Central Bank of Iran pursues the policy to channel the liquidity toward the production sector.

Iranian MP and First Deputy Chairman of the Economy Committee of the Parliament Iraj Nadimi told trend April 27 that the main reason why inflation fell to about 15 percent in the administration of President Hassan Rouhani was the policies adopted to rein in liquidity growth. The inflation rate in Iran hit 15.5 percent in the first fiscal month of Farvardin (ended on April 20), according to the Central Bank of Iran.

According to an early April report by the IMF, Iran's economy contracted by 6.6 and 1.9 percent in 2012 and 2013 respectively. Last year it hit 3 percent and for the current year it is expected to reach 0.6 percent. For the next year, Iran 's economic growth is expected to reach 1.3 percent.

Rouhani has promised to decrease the inflation rate to 5 percent in the Iranian fiscal year of 1395 (to end on March 20, 2017).

However, if liquidity does not help the domestic product growth, it will have a negative impact on the economy.

Edited by CN