The Majlis Research Center has called on the government and monetary regulators to boost the capital buffers of banks to help them cope with recession that observers predict will afflict the economy.
In an analytical report, MRC said liquidity in the past five years is high enough to show its inflationary effects. Since 2014, liquidity has grown buy an average 28% annually and reached 16,930 trillion rials ($145 billion) last October, which according to the think tank created the grounds for galloping inflation.
This was exacerbated by the overall decline in investments that together with falling private sector consumption forebode an economic recession in the near future.
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