The Governor of Central Bank of Iran Ali Salehabadi says the government’s move to pay new cash subsidies would have little impact on money supply with no significant inflationary consequences.
In a talk with state TV at the weekend, Salehabadi spoke about the potential monetary impact of the recent government decision to scrap the costly forex subsidy policy, which so far has more than doubled the prices of key food items like cooking oil, chicken, poultry and dairy products.
“The inflationary impact of cash distribution arising from expansion of broad money is out of the question,” he was quoted as saying by the CBI website.
The senior banker, however, did not reject the inflationary impact of the decision resulting from anticipated supply shocks.
May 13, 2022 19:45
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CBI Boss Supports End to Forex Subsidy Policy
Earlier in the week, the government officially put an end to the allocation of subsidized forex ($1=42,000 rials) to import essential goods, including corn, soymeal, unprocessed oil, oilseeds and barley, in addition to wheat, flour and medicine
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