Minister Forecasts Slump in Money Supply
Economy, Business And Markets

Minister Forecasts Slump in Money Supply

Minister of Economy Ali Tayyebnia has forecast a decline in money supply once Iran’s assets frozen overseas are released.
The minister spoke about the release of frozen dollars and its impact on the economy on Friday, saying the government is not authorized to spend the money since it belongs to the Central Bank of Iran, IRNA reported.
“The government had used that money in the past in Iranian rial and the funds will now go to the CBI coffers in dollar,” Tayyebnia said. “It has been planned that the country’s currency reserve abroad as well as the increased revenue from a surge in oil exports will be used to develop the private sector.”    
Tayyebnia reiterated that since the released assets will not be spent by the government, it will not increase the money base.  
Iran may reportedly obtain access to over $100 billion in frozen funds, but CBI officials say only $29 billion are now accessible, of which $23 billion belong to the central bank as international reserves and $6 billion, mainly the proceeds of oil sales, belong to the government.
Pundits had remarked in the past that CBI could curb growing liquidity by selling the foreign assets in exchange for rial.
Commenting on the real exchange rate for the US dollar, Tayyebnia reiterated that the rate should be determined by the free market.
“The real rate is what is being traded in the market now,” he said.
Many expected the rial to appreciate after the nuclear deal between Iran and major world powers in mid July, but that did not happen. Now some suspect government intervention in the forex market. The rial lost over 4% versus the dollar in the runup to the signing of the deal, but has regained all the lost territory.

Short URL : http://goo.gl/Aik9Of

You can also read ...

Iran Missing Advantages of Foreign Banks’ Presence
Tehran Chamber of Commerce, Industries, Mines and Agriculture...
Oman Eyes Iran Market Amid Rising Imports
Ithraa, Oman’s inward investment and export promotion agency,...
Luxgen’s S3 is a 5-seater subcompact sedan equipped with a 1.6-liter, 116 hp gasoline engine.
Local company Arman Motor Kavir is set to unveil two imported...
Iran Exim Bank Tapping NDFI Resources
Export Development Bank of Iran–the country's exim bank–is to...
Transport MoU With South Korea
Iran and South Korea have signed a memorandum of understanding...
Billet and bloom shipments made up the bulk of exports, reaching 1.78 million tons, up 28% year-on-year.
Iran’s semi-finished steel exports during the first seven...
Local producers have often called  on the government to increase import tariffs on tires.
In order to “protect domestic production”, the Industries...
IRIB Mulls Issuing Bonds
The Islamic Republic of Iran Broadcasting is considering...