Economy, Business And Markets

Measures in Support of Resistance Economy

Measures in Support of Resistance Economy Measures in Support of Resistance Economy

The Central Bank of Iran has developed a roadmap comprising of 11 policies, 39 plans and over 150 immediate measures to contribute to the development of the “resistance economy” plan – a set of guidelines proposed by the Leader of the Islamic Revolution Ayatollah Seyed Ali Khamenei to counter sanctions, promote domestic growth and reduce reliance on oil revenues.

The CBI assigned a working group to examine, analyze and develop the measures, policies and strategies which could help realize the resistance economy, IRNA reported.

The regulator claims it has tried in the past 18 months to promote monetary discipline, improve monetary management, stabilize the currency market, and provide financing for the manufacturing sector.

In 2013, money supply grew by 29.1 percent, down from 30 percent in 2012. Money base also decreased from 27.6 percent in 2012 to 17.8 percent in 2013. Money multiplier, in the meantime, rose from 1.9 percent in 2012 to 9.6 percent in 2013.

The improvements continued into 2014. Money growth reached 15.6 percent in the 10 months to January 20, 2015, which came as a result of 0.6 percent growth in money base and 15 percent growth in money multiplier.

By January 20, money multiplier stood at 5.950, showing 15 percent growth year-on-year. Money supply grew by 22.7 percent in the 12 months to January 20.

The CBI also managed to reduce inflationary expectations and improve the credibility of economic policymakers, which eventually helped restore stability in gold, housing and currency markets.

For instance, the average rate of the US dollar in the Iranian currency market increased 0.6 percent only in the year to February, the report said.

In addition, inflation decreased from 40.4 percent in October 2013 to 15.8 percent in February 2015.

Among many others, the CBI also succeeded to correct funding methods of the controversial Mehr housing project, which many believe was the root cause of 40 percent inflation, and improve the performance of real economy.