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EghtesadOnline: Central bank data show that total liquidity was 16.93 quadrillion rials ($166.06 billion) on October 22 -- 20.7% higher compared to the same month last year.

It also reported a 10.7% rise compared to the end of the last fiscal in March.

Although the figures show an overall rise in money supply in annual terms, a comparison with the same period two years ago indicates a decline in the pace of liquidity growth. This is while liquidity in October 2017 was up by 23.3% compared with its previous year, which indicated a slower growth.   

According to Persian economic daily Donya-e-Eqtesad, average liquidity growth which stood at 30% in July 2016 started a downward trend since then and decelerated by 10% in May of this year, Financial Tribune reported.

Ali Divandari, the head of Monetary and Banking Research Institute, affiliated to the Central Bank of Iran, highlighted the decline on Monday. 

“On the whole, liquidity growth has slowed and inflation growth has stopped”, he was quoted as saying on the sidelines of a ceremony held to honor the best-performing money and banking researchers by MBRI.   

Earlier this month, Akbar Komijani, the deputy CBI boss, pointed to CBI measures to sustain monetary discipline as the most influential factor in curbing liquidity. 

Of the total liquidity, the share of M1 (money supply that includes physical currency and coin and demand deposits) in the banking system was equal to 2.4 quadrillion rials ($23.7 billion) by October 22, showing 47.7% annual hike. This is while M2 (near money) amounted to 14.51 quadrillion rials ($142.33 billion) -- up 17.2% YOY.

M1 and M2 also witnessed increase of 24.3% and 8.7% respectively compared to the last yearend.

 

Banking Assets 

The newspaper said the banking system held 8.3 quadrillion rials ($81.4 billion) in foreign assets by the end of the sixth fiscal month to October, registering a 32.2% increase compared to the same month last year. The figure was 13.4% higher compared to the end of the last fiscal,

The government sector, including government and state-owned companies, had 870 trillion rials ($8.5 billion) in deposits and loans by the end of October, indicating an annual rise of 42% and 17.2% increase compared to the last fiscal end.

Additionally, the figure for non-government sector stood at 16.48 quadrillion rials ($161.62 billion) to register 20.5% growth annually and 11% rise compared to late last year.

Sight deposits amounted to 1.96 quadrillion rials ($19.29 billion), up 52% year on year and 30.8% compared to the last yearend. On the other hand, time deposits witnessed 17.2% year-on-year rise to reach 14.51 quadrillion rials ($142 billion) while the same registered 8.7% increase compared to the end of last year.

According to the report, the government sector owed 2.97quadrillion rials ($29 billion) to the banking system in late October, registering a 20.9% increase compared to the same month a year ago. The figure grew by 14.8% compared to the end of last year.

The non-government sector, however, had 11.7 quadrillion rials ($115.3 billion) in debt to banks, which shows 18% increase compared to the same month last year and a 7.7% rise compared to the end of last fiscal.

Bank notes and coins in public hands totaled 452 trillion rials ($4.43 billion) by October. 22, up 31.6% compared to the same month last year and by 2.1% compared to the yearend.

 

Iran Liquidity central bank data total liquidity