Curbing the growth of inflation and stability of the currency market was achieved by the implementation of the economic stabilization policy
According to Iran EconomistThe Supreme Leader of the Islamic Revolution, in a meeting with the President and the members of the 13th government, appreciated and praised the good and strong performance of the government, especially the stability of the currency market and the improvement of macroeconomic indicators.
“Masoud Tavakoli” in an interview with a reporter Iran is an economist Regarding the leader’s praise of the performance of the 13th government and the stability of the currency market, he said: One of the instructions given by the 13th government to the Central Bank from the beginning was to control the exchange rate and market fluctuations.
This economic expert said: The main factor of exchange rate changes is inflation, and in other words, it can be said that the difference between domestic and American inflation rates is the cause of exchange rate fluctuations (dollar).
Stating that there is a positive correlation between the exchange rate and inflation, he added: liquidity and monetary base are two indicators that affect inflation, and these indicators, along with political developments and inflation expectations, affect the dollar rate, on the other hand, exchange rate fluctuations also affect Inflation works.
Tavakli said: The central bank should have considered two approaches to control the fluctuations of the currency market, firstly, it would curb inflation and reduce factors affecting it such as the monetary base and liquidity, and on the other hand, inflationary expectations and the psychological atmosphere of the society that is affected by the changes. It controlled the dollar rate.
This economic expert stated: The central bank was able to reduce the liquidity and monetary base and develop the currency market that was launched in the previous government and add service currencies to it.
He continued: With the start of Farzin’s work at the Central Bank, the foreign exchange market expanded, and the Money and Credit Council expanded the scope of this market and added the gold market to it.
Tavakli emphasized: By implementing policies to stabilize the currency market, the main goal of curbing the growth of inflation and the factors affecting it, as well as people’s expectations of the currency, was realized.
Tavakli said: It is a basic principle in the economy that when demand exceeds supply, prices will increase and inflation will rise, but when supply and demand are balanced, the market will be balanced.
The economic expert added: There are two demands in the foreign exchange market, one is the real demand, which is the importers of goods, parts, and raw materials, and the other part is the demand for service currency, of course, there is also a third demand, who invest in foreign currency to cover the risk and to cover the inflationary expectations. .
He clarified: the exchange center was able to enter in two areas; He was successful in providing maximum foreign exchange for importing goods and raw materials and people who needed currency for services, and as a result, the market calmed down.
Tavakli continued: In the next step, the exchange center will be completed when it publishes the tools and the risk coverage that the applicant for investment in the field of foreign exchange responds to, and along with the good political news, peace will reign over the foreign exchange market and the exchange rate will fluctuate in a small space. and this will be a factor to control inflation.
Referring to the policies of the central bank in curbing inflation, the economic expert said: All the policies to curb inflation had positive consequences, and the most important effect was that it eases planning for economic operators, creates a safe space for investors, and stabilizes the economy.