Iran says 48% of its liquidity not serving economy

Business Materials 22 June 2015 12:14 (UTC +04:00)

Tehran, Iran, June 22

By Mehdi Sepahvand - Trend:

Iranian Minister of Industry, Mining and Trade Mohammad Reza Nematzadeh said 52 percent of the country's liquidity serves the economy while the remaining 48 percent is out of the operational sphere.

"Last year we had a growth of 6.8 percent in industries, 9.8 percent growth in mines, and 3.7 percent growth in trade," he said, reporting his ministry's performance of the last Iranian fiscal year (which ended March 20) on the national TV IRIB June 20.

The inflation of the past few years has led to the situation where in the downstream section capital comes short, he said.

"We are following policies designed to get out of the economic downturn. We presented 30 articles to the Parliament. As 30 other articles were added by the Parliament, we are drafting the related regulations which will raise part of the problem," Nematzadeh said.

"15 percent of the liquidity is bank claims accumulated and reached 900 trillion rials (over $30 billion) and does not have anything to do with the ministry and we tried to reduce these claims," the minister stated.

Also, banks have been obliged to transfer all of their assets which do not relate to their banking operations within three years, and then feed the money into loans they grant, Nematzadeh said, adding that if banks refrain from doing so, they will be fined.

A recent report by the Central Bank of Iran said that last Iranian fiscal year the country's liquidity increased by 22 percent.

Iran's gross domestic product (GDP) growth rate hit three percent in the last Iranian fiscal year (ended on March 21).

Through adopting policies to curb liquidity and managing the foreign currency market, the inflation rate decreased by 19.1 percent, reaching from 34.7 percent two years ago to 15.6 percent last year, and to 15.5 percent in April.

Edited by CN

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