Baku, Azerbaijan, Oct. 15
By Elnur Baghishov - Trend:
Oil sale and taxes are two major sources of revenue for the Iranian government, Iranian expert Lotfi Ali Bakhshi told Mizan agency.
"Meanwhile, government's expenditure is more than these two sources combined. As a result, we face a budget deficit every year. The government receives money from the treasury of the Central Bank to compensate budget deficit. As a result, the liquidity ratio is increasing," he added.
According to Lotfi Ali Bakhshi, some financial institutions have done much advertising in investments sector in the past few years.
"Citizens trusted and gave them their capital. Then, some of these businesses left the country taking the citizens' money. The government allocated money from the Central Bank's treasury to cover the lost capital of citizens."
"As the bank's interest rates dropped, investors invested in gold and foreign currency markets. Instead of preventing this trend, the government created conditions for them. That is, citizens can buy foreign currency as much as they like. The government's decision led liquidity to increase in late March. With this excuse, about $30 billion were taken from the treasury of the Central Bank," the expert said.
The expert stressed that the role of a central bank in Iran is different than that in the rest of the world: in developed countries central banks are independent.
"In other words, governments borrow money from central banks. However, in Iran the treasury of the Central Bank makes the payments."