New statistics from the Central Bank of Iran show that liquidity in the country reached a staggering 79 quadrillion rials (approximately $133.333 billion) by the end of the last Persian year (March 21, 2024).
The new statistics released by the Central Bank on Sunday, July 7, show that since the start of Ebrahim Raisi‘s government, the volume of liquidity has more than doubled; in other words, the liquidity generated during Raisi’s government exceeds the total liquidity in the history of Iran’s economy up to the establishment of the thirteenth government.
The Central Bank’s report highlighted the “decline in the growth rate of liquidity” and defended the Central Bank’s performance in controlling liquidity. However, details of the statistics from this financial institution show that liquidity in Iran in August 2021, when Hassan Rouhani’s government handed over executive power to Ebrahim Raisi’s government, was about 39 quadrillion rials (approximately $65 billion), but by the end of last year, this figure had more than doubled, and it is unclear how much liquidity has increased this spring.
Liquidity is the most important factor of inflation, and this index in Iran is due to the uncontrolled printing of unbacked money by the Central Bank to cover the government’s budget deficit.
The doubling of liquidity in the country during Ebrahim Raisi’s tenure comes while he had promised in his election campaign to control inflation by curbing government borrowing and liquidity. However, according to the latest Central Bank statistics, government borrowing from banks has also doubled under the thirteenth government.
The Central Bank has not released the volume of government debt to banks since February and March, but February 2024 statistics show that this figure has surged to over 13 quadrillion rials (approximately $21.6 billion), more than double the start of Ebrahim Raisi’s government.
Borrowing from banks and the Central Bank itself is only a small part of the total government borrowing; according to the CEO of Iran’s National Development Fund, the government’s debt to this institution has reached about $100 billion, which is equivalent to more than a quarter of Iran’s entire economy.
The issue of rampant liquidity growth in the country during Raisi’s tenure was also raised by Masoud Pezeshkian, the winner of the recent elections, during the election debates. Last week, the Central Bank released a detailed report claiming that the “pace of liquidity growth has slowed,” but did not admit that the volume of liquidity had effectively doubled over three years, with the liquidity produced during the thirteenth government alone equaling the total liquidity of the country up to August 2021.
According to estimates by the International Monetary Fund, the volume of liquidity in Iran is expected to increase by 33 percent during the current Persian year.
