Decrease in liquidity growth to 29%

According to the report of Iran Economist, citing the public relations of Central Bank; This bank set a 30% liquidity growth targeting program for 1401 and was able to increase the ratio of legal deposits at the level of the banking network by half a percentage point by adopting operational measures such as controlling the creation of bank money through the regulation and strict implementation of the growth control of the banks’ balance sheets. Directing the interest rate in the interbank market around the policy rate and within the corridor of the interest rate of the interbank market, to control this variable significantly; So that the growth of liquidity at the end of 2011 was equal to 31.1%, which shows a significant decrease compared to the last two years (the growth of liquidity in 2019 and 2018 was equal to 40.6% and 39.0%, respectively) and indicates the partial realization of the plan. It has money set for the year 1401.

In continuation of the plans of the government and the central bank to control the growth of liquidity and inflation and in line with the year’s slogan of “controlling inflation and growth of production”, the target of the growth rate of liquidity for the year 2012 is equal to 25%; The preliminary statistics of 1402 also show that in the first quarter of this year, liquidity has grown by 3.9 percent, which is even significantly lower than the targeted liquidity growth for the first quarter of 1402.

Also, the twelve-month liquidity growth rate at the end of June 1402 decreased by 8.8 percentage points compared to the same period of the previous year (equivalent to 37.8% in June 1401) and reached 29.0%, which indicates the Central Bank’s diligence and focus on the implementation of the policy of controlling the growth of banks’ balance sheets and Controlling the growth of banks’ money creation and consequently the growth of liquidity this year.

Following the formulation and implementation of the monetary plan and setting the liquidity growth target for the years 1401 and 1402, along with the serious pursuit of the policy of controlling the growth of banks’ balance sheets and fining the banks that violate the limits by increasing the ratio of legal deposits, the twelve-month growth of liquidity has decreased significantly. found and reached from 42.8% in October 1400 to 29.0% in June 1402.

Following the formulation and implementation of the monetary program and setting the target of liquidity growth for the years 1401 and 1402, along with the serious pursuit of the policy of controlling the growth of banks’ balance sheets and fining the banks that violate the specified limits by increasing the ratio of legal deposits, the twelve-month growth of liquidity has decreased significantly. found and reached from 42.8% in October 1400 to 29.0% in June 1402.

* Monitoring programs of the central bank in order to control inflation

Regarding the policy of controlling some of the balance sheets of banks and credit institutions and the revisions and amendments made in it, it is necessary to explain that in 1401, the Executive Board of the Central Bank in its meeting dated 05/08/1401, “Authorities supervising the control of some assets of the country’s banking network” (Notification under Circular No. 421929/99 dated 12/27/1399) completed and modified and communicated to the banking network through Circular No. 127050/01 dated 05/24/1401.

Based on the aforementioned amendment rules, the monthly net growth limit of the total assets of each bank/credit institution is determined and communicated in proportion to the score calculated based on the banking health indicators and based on the targeting liquidity.

Also, in this circular, we refer to the resolution dated 04/05/1401 of the Money and Credit Council regarding the permission to increase the legal deposit ratio up to 15% for unhealthy banks and credit institutions that violate the regulations and rules governing the growth of their balance sheets by the Central Bank. has been

Further, due to the growth of debts outside the regulatory standards of some banks, despite the permitted growth of their assets, the central bank’s board of directors has decided to approve alternative regulations under the title “Regulations for the control of a certain balance sheet of the country’s banking network” including the regulations for Controlling the amount of assets and liabilities of banks and credit institutions (approved by the 49th meeting dated 03/10/1401 of the Executive Board of the Central Bank) and its notification through Circular No. 263882/01 dated 21/10/1401 to the banking network.

Adding the issue of controlling some debts, changing the basis of calculation from average monthly growth to the allowed monthly amount and imposing restrictions on granting/creating facilities/large and related liabilities of the wrong bank/credit institution are among the most important changes compared to the previous rules.

* 25.8% increase in payment facilities in the first three months of 1402

It should be noted that while controlling the growth of liquidity (in the framework of the monetary program), the Central Bank has not neglected the financing of the economy and specifically the productive sectors of the economy, and the policies of directing credit towards productive economic activities and financing business owners and households. put on the agenda. In this context, we can mention the total facilities paid by the country’s banking network to various economic sectors during 1401, which has reached 44485.3 thousand billion Rials with an increase of 45.3% compared to last year.

Also, the total facilities paid by the country’s banking network to various economic sectors during the first quarter of 1402 was equal to 9213.5 thousand billion Rials, which shows an increase of 25.8% compared to the figure of the same period last year. 85.2% of the total payment facilities during the mentioned period belonged to business owners and 14.8% to the final consumer (household). It should be noted that 66.5% of the total payment facility in the mentioned period was used to finance the working capital of production units. Also, 82.5% of the total facilities paid in the said sector have been spent on the working capital of industrial and mining units.

end of message/