Iran monetary base expanded by %5.4 in H1 fiscal year: Chief banker
Central Bank of Iran (CBI) Governor Abdolnasser Hemmati says that the country’s monetary base expansion in the first half of the current calendar year was a modest one as he dismisses claims the lender used extra finances to fund imports based on an official rial price of 42,000 against the US dollar.
Hemmati said on Thursday that the balance of monetary base, or the amount of cash in circulation and deposits at the CBI, grew only by 5.4 percent in the six months to September 21 compared to the end of the year to March 20, 2020.
“Restricted growth in the monetary base in a sign the CBI has insisted on controlling the growth of powerful money in the society,” Hemmati said.
The governor said M2 Money supply had also expanded by 15.5 percent in the first half of the fiscal year compared to March.
He said the figures were based on initial reports by the Economic Statistics Department of the CBI.
The announcement comes despite a recent report by the Iranian parliament suggesting that the CBI has been using extra reserves to fund imports of staples and medicines based on an official currency price which is much lower than a current price tag of 300,000 for the rial against the US dollar.
The Iranian parliament’s research center said in the report published on Wednesday that the CBI had injected around $3.3 billion from its reserves to fund the government scheme for imports.
The report said the injection, caused by extremely low sales of crude earlier this year because of US sanctions and the coronavirus pandemic, had caused the monetary base to expand by 15 percent or nearly 500 trillion rials (nearly $17 billion).
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