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CBI Says Cash Injection Only Supports Production, Job Creation

CBI Says Cash Injection Only Supports Production, Job CreationCBI Says Cash Injection Only Supports Production, Job Creation

The Central Bank of Iran does not prioritize cash injection into the market, but only to help the banks support production and job creation, the head of the Economic Office at the Central Bank of Iran said.

"CBI's priority is to increase money supply through the multiplier effect," Abolfazl Akrami was also quoted as saying by IRNA.

Asked if CBI's resources are going to be used for lending, the official said, "CBI's resources are strong and dangerous [in terms of stoking inflation]. In other words, it's hot money so the CBI does not wish to inject any outside money into the economy."

Akrami noted that CBI is not going to increase the monetary base as long as possible and "if we manage to resolve the banking issues, they will be able to support production and employment".

Asked why CBI used its resources to finance the two big auto manufacturers last year, he said, "Those are only special cases where CBI has to intervene out of necessity."

The CBI official noted that monetary bodies have supported productive sectors and emphasized that in order to be successful in the production sector and create jobs, people need to show a tendency for buying domestic products.

"The government allocated more than 160 trillion rials ($4.2 billion) in loans to small- and medium-sized enterprises to revitalize the economy," he added.

He noted that people should know that buying Iranian products will affect all sections of the society and lead to economic growth.

Akrami also suggested that manufacturers and producers increase the quality of their products to be able to compete with foreign rivals.   

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