During a visit to the Central Bank of Iran on Sunday, President Ebrahim Raisi emphasized the monetary and banking mandates of the CBI.
Raisi reiterated the “significant role of the central bank in managing financial resources and reforming the banking sector”.
After a briefing on the CBI performance by the governor, Ali Salehabadi, the president spoke about the role and responsibility of the regulator, IRNA reported.
Mobilizing efforts to boost the sagging national currency, strengthening the balance sheets of lenders, curbing the unbridled growth of money supply and improving oversight, he said, are among the duties of the CBI which it should fulfill.
He called on the CBI to make constructive changes to the “composition of currency reserves” to better accommodate the investment and commercial needs of the country.
Banks and credit institutions were asked to ease the cumbersome rules for microcredit and diversify the collateral they demand from those seeking loans.
In line with efforts to improve transparency in the key banking industry, fight money laundering and curb tax evasion, Raisi instructed the CBI to create an efficient mechanism based on which bank accounts of business people would be separated from personal accounts.
Last but not the least, was his concern about manufactures’ need for working capital. He called on the central bank to step up efforts for a sustainable supply of cash to the manufacturing and trade sectors.
Among other concerns was the unreasonable issuance of money by banks. “If liquidity is channeled toward production sectors, there will be no reason for anxiety. But it will be ruinous if funds are used for speculative activities,” he warned.
Cutting Broad Money Growth
Appreciating the CBI’s efforts to control the unprecedented growth of monetary factors in recent month, Raisi pointed to the CBI’s move to cut annual broad money growth by 25%.
“Realizing this target will be a significant step in taming inflation,” he was quoted as saying.
Data released by the CBI show that broad money and the monetary base continued to decline in the month to July 22. Broad money stood at 52,501.4 trillion rials ($181 billion) by the said period, indicating 8.6% growth in four months. It was 1.3 percentage points lower than in the corresponding period last year.
On annualized basis, broad money increased 37.4% as of July 22, which was 2.5 percentage points lower than the annual growth in the first four months of last year.
Likewise, monetary base stood at 6,530.3 trillion rials ($22.5 billion) by that period, rising 8.1% in four months since the beginning of current fiscal year in March.
The CBI said the growth tamped down as the monetary base had expanded 12.8% in the first four months last year.
It rose 26.2% in 12 months, down 1.6 percentage points from annualized growth of 27.8% in the month before.
