Iranian banks held foreign assets worth 23,833.1 trillion rials ($79.4 billion) by the end of the fourth calendar month on July 22. This was up 18.2% compared to the similar period last year.
Data released by Central Bank of Iran show that the pace of growth foreign assets declined noticeably. Banks’ annualized growth in overseas assets was 54.6% in July 2021.
CBI’s foreign assets were in the region of 7,289.6 trillion rials ($24.3b) in the period, up 10.5% y/y but down 0.4% in the first four months of the present fiscal year.
The pattern of increase in CBI foreign assets had given rise to the monetary base in recent months. But as the pace of growth in CBI assets slowed, its contribution to the ballooning monetary base dipped.
The monetary base stood near 6,530.3 trillion rials ($21.7 billion) in the year to July 22, indicating 26.2% rise on the same period last year. It expanded by 8.1% in the first four months of the year.
Data show that the CBI’s foreign assets alone accounted for 15.7 percentage points of annualized monetary base growth in the said period. This is while its contribution to 4-month growth of the monetary base was zero.
Commercial Banks
Commercial banks held 2,384.6 trillion rials ($7.9b) in overseas assets, which was 21.9% higher y/y and down 1.2% in four months.
Specialized banks held 3,975 trillion rials ($13.2b) in foreign assets, indicating 19.2% rise y/y and up 1.4% in four months.
Likewise, foreign assets held by private banks and credit institutions were at 10,183.9 trillion rials ($33.9b) -- 23.1% higher annually and up 2.5% in four months.
The report also reflected on the CBI’s other assets, including banknotes and debts of the government and other lenders.
Total assets owned by the CBI amounted to 12,329.3 trillion rials ($41b) in the said period. The bank held banknotes and coins worth 991 trillion rials ($3.3 billion), which was 18.5% higher from the earlier year.
Government and state-owned companies owed 2,044.5 trillion rials ($6.8b) to the CBI during the period, 1.5% higher from the corresponding period last year.
Debts of banks to the CBI were said to be at 1,762.7 trillion rials ($5.8b) in the 12 months – up 49.3%. Debt of commercial lenders to the CBI jumped 20.5% in four months since the beginning of the fiscal year in March.
Banks and credit institutions had 5,551.2 trillion rials ($18.5b) in deposits with the CBI in the same period, which was 27.3% higher y/y.
Reserve requirements accounted for 5,481.2 trillion rials ($18.3b) of the total deposits of banks with the CBI, indicating 37.9% growth y/y.
Reserve requirement not only guarantees deposits, but also serves as a CBI tool for controlling money circulation, inflation and money supply growth. As per rules of the Money and Credit Council, the top monetary and policymaking body, the central bank can set the reserve rate between 10% and 15%.
