A 2-fold increase in liquidity growth during Hemmati’s presidency

According to Iran EconomistDuring the 34-month period of Abdulnaser Hemmati’s presidency of the central bank, we witnessed the explosion of liquidity growth, the inflationary effects of which fueled Iran’s economy.

At the beginning of Abdul Nasser Hemmati’s presidency of the central bank in the 12th government (August 2017), liquidity growth was 20.5 percent.

However, with the adoption of Hemmati’s policies in the central bank, which were mainly following western versions, the growth of liquidity increased continuously and month by month, so that in June 1400, when Hemmati resigned from the central bank for the presidential election, the growth of liquidity increased from 39% had also passed. In this way, during the tenure of Hemmati’s presidency of the central bank, the growth of liquidity almost doubled and increased by nearly 20 percentage points.

In the few months that Hemmati’s deputy (Akbar Kamijani) was the head of the Central Bank during the transition period of the government, the same upward trend of liquidity growth continued and exceeded 42%.

With the change of the Governor General of the Central Bank in the presidential government, the policy of controlling the growth of liquidity was adopted and as the government avoided borrowing from the Central Bank, the growth of liquidity gradually decreased so that according to the latest statistics at the end of February 1401, the growth of liquidity reached 32%. In this way, the liquidity growth in the presidential government has decreased by 10 percent.

Of course, the complete cleanup of the liquidity explosion disaster caused by Hemti’s management is still ongoing and the 13th government is trying to continue managing the monetary base and liquidity as much as possible by not borrowing from the central bank so that liquidity growth reaches lower figures.

Liquidity growth is one of the main factors of inflation growth in the economy, and the disaster that occurred in the doubling of liquidity growth during Hemmati’s presidency has been one of the important causes of inflation in Iran’s economy, the consequences of which continue to plague the people’s tables.

It is strange that the regulatory and punitive institutions take legal action against the high prices of retailers and wholesalers, but they have nothing to do with a person who, by doubling the growth of liquidity, was one of the main factors in increasing inflation and reducing the purchasing power of tens of millions of Iranians, and this person is still freely in the media space. He makes comments and even mocks the system’s macro policies such as dollarization.