Tehran, Iran, December 18
By Mehdi Sepahvand, Khalid Kazimov - Trend:
The CEO of Securities and Exchange Organization of Iran (SEO), Shapour Mohamamdi, has expressed hope that issuing bonds will not cause inflationary impact in the country.
“Issuing government bonds are less likely to cause inflationary pressure, if their rates are close to the current rates in the country. But if the demand for finances increases, it would cause pressure on some investments,” Shapour Mohamamdi told Trend.
He further added that the government and parliament will monitor the situation in order to prevent any inflationary pressure.
“We are making efforts in order to make sure that the issuance of bonds will not leave an inflationary impact on the economy,” the CEO said.
Iranian President Hassan Rouhani’s proposed conservative state budget of about $104 billion for the next year which has caused concerns over deficits and their possible contribution to a rise in the country’s inflation rate. Issuing government bonds is among the main methods to reduce the budget deficit.
Many believe that inflationary pressures are among the major potential problems with high levels of government borrowing. In the meantime, deficits may lead to greater money base growth, which can create inflationary pressure.
The inflation rate in Iran’s urban areas for the 12-month period to Nov. 22 stood at 9.9 percent.