Debts of banks and credit institutions to the Central Bank of Iran declined 2.88% in the month to September 22.
According to the latest figures, the debts amounted to 1,660.2 trillion rials ($4.7 billion) by the end of the six month of the fiscal year (Sep 22).
Despite a decline on the month before, the figure grew by 13.4% during the first six months of the fiscal year (started in March 2022) and up 30.2% compared to the same period last year.
Commercial state banks owed 437 trillion rials ($1.23 billion) to the CBI, which was down 11% since the beginning of the year of the year but 23.8% higher year-on-year.
Debt of specialized banks to CBI amounted to 602.3 trillion rials ($1.7b) at the end of the second quarter, up 5.5% on annualized basis and 22.3% compared with the beginning of the year.
Bank Maskan (main housing lender), Export Development Bank of Iran, Bank of Mine and Industry, Cooperatives Development Bank and Bank Keshavarzi (agro bank) are the five specialized banks in Iran.
Private commercial banks and credit institutions accounted for 620.9 trillion rials ($1.75 billion) of the total debt. The figure shows 30.7% increase during the first six months of the year and 8.8% growth on the same time last year.
Private banks, however, showed 8.2% decline in debt in the sixth month.
CBI lending to the government in the form of discretionary spending is said to be the main reason behind the explosion in money supply.
CBI data also show the value of government arrears to the CBI declined 1.9% during the sixth month. The figure jumped 69.1% in six months since the beginning of the current fiscal year. It was 839% lower than the corresponding period last year.
Overreliance on CBI money was the main contributor to the expansion of the monetary base with 10.1% share in the first half of the current fiscal year. Bank debts to the CBI accounted for 3.3% of the monetary base growth during the same period.
Need for increased discretionary spending became more conspicuous after the government failed to realize the ambitious revenue forecast in the annual budget.
