54399
95% of Money Supply From  Private Sector Deposits
95% of Money Supply From  Private Sector Deposits

95% of Money Supply From Private Sector Deposits

95% of Money Supply From Private Sector Deposits

The governor of the Central Bank of Iran has analyzed recent concerns over the growth of money supply saying that private sector savings–as opposed to state deposits–comprise 95% of the liquidity.
“There is currently much criticism aimed at the increase in money supply and the enormity of its volume in the economy with some calling it an enigma!” Valiollah Seif wrote in his personal channel in the instant messaging app Telegram.
“That is while the volume of liquidity is among economic variables that not only are incapable of reflecting all economic complications, but also talking about its enormity without considering the size of the economy is futile,” he adds.
Broad money (M2) has currently reached 11.02 quadrillion rials ($243.8 billion) which in comparison with the 5.6 quadrillion rials ($157.8 billion) in the summer of 2013 when President Hassan Rouhani was elected, registers a staggering rise.
The official calls the volume of liquidity a touchstone for measuring the money supply “which is obtained from the sum of banknotes and coins in circulation and the deposits of the non-government sector” within the banking system. The central bank collects deposit data meticulously and continuously, he says, and publishes it after calculating the volume of liquidity in line with international standards.
“It must be considered that the non-government sector deposits make up 95% of the money supply,” Seif notes adding that these deposits belong to the people and are safeguarded in banks. “Owners of these deposits have the right to withdraw their money at will.”
The central bank chief notes that perhaps critics turning their attention to liquidity are doing so with regard to limitations in lending capabilities of the banks in spite of a rise in liquidity. “Cognizant of the issue, the CBI has often  explained and outlined the subject of credit crunch and freezing of a portion of the banks’ assets as a result of stacking non-performing loans, the government’s debt and non-financial assets.”
Unfortunately, he says, a decade of pressure on their assets has rendered the banks incapable of lending proportional to their vast potential.
The central bank has managed to partly remedy the situation by implementing short-term countermeasures, “but a complete alleviation of the problems demands major reforms of the monetary regime and the banking sector,” Seif adds.
He concluded by stressing that all those in charge of the economy must take part in promoting the Resistance Economy  -- guidelines set by Leader Ayatollah Seyyed Ali Khamenei to empower domestic production and reduce reliance on oil export revenues.

 

Short URL : https://goo.gl/PCBxJx
  1. https://goo.gl/nP9gkJ
  • https://goo.gl/kgp627
  • https://goo.gl/hddevy
  • https://goo.gl/6DR60n
  • https://goo.gl/aakVrN

You can also read ...

Iran’s Amendments to CFT Law, a Step in Right Direction – Part 2
In the article titled “Amendments to CFT Law, a Step in Right...
Iraqi PM Cancels Iran Visit
Iraqi Prime Minister Haider al-Abadi has cancelled a visit to...
TSE Fastest-Growing Stock Exchange in World
Tehran Stock Exchange was the world’s fastest-growing stock...
Certified Exchangers List Gets Longer
The Central Bank of Iran has released the updated list of...
Chinese EV Sharing Platforms Seeking New Funds
Two electric vehicle-sharing platforms backed by powerful...
Export of Six Commodities Banned as of Aug. 23
The government has banned the export of different kinds of...
Iran Khodro Makes Inroads Into Azerbaijan Car Market
Since March, and through a joint venture between Iran Khodro...
Auto Importers Warned Against Price Gouging
Iranian auto importers, who had brought vehicles into the...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus