Three main factors in the 38.2% growth of liquidity in April

According to the reporter of Poli Mali news site, the statistical excerpt published by the country’s monetary institution indicates that the monetary base in April 1401 increased by 31.5 percent compared to the same month of 1400 to about 612 thousand billion tomans.
Out of the total of 4,823,000 billion tomans of liquidity announced, 952 billion tomans were money and 3,871 billion tomans were quasi-money.
Considering the clarification of the debts of public and private banks and the announcement of their accumulated losses of 320 thousand billion tomans, it can be concluded that almost more than half of the monetary base of the country is the product of the unfavorable performance of these banks.
These statistics clearly show that the dominant factor in the 31.5% increase in the monetary base is the growth of about 20 percentage points in the net foreign assets of the Central Bank. This means that despite the 13th government’s emphasis on selling oil and receiving its money, the government still does not have the possibility of entering the currency from the sale of oil into the country, and therefore, like the previous government, it considered this currency among the foreign assets of the Central Bank and Mabe prints Rials for it.
Abdolnaser Hemmati, the former head of the central bank and Seyed Ibrahim Raisi’s electoral rival, who is currently criticizing the performance of the 13th government, wrote in a note that despite the 3-fold announcement of oil revenues in 1400, the growth of the monetary base was 32%, equivalent to 145 thousand billion tomans. have been.
He explained that the main contribution of “net foreign assets and net other items” in the growth of the monetary base was due to the conversion of foreign currency assets to Rials and the purchase of bank bonds (repo balance).
However, the implementation of the policy of removing 4,200 Tomans currency and allocating 300,000 and 400,000 Tomans subsidies to individuals is not a good way, but it has caused a decrease in the amount of Rials that the government pays to individuals for basic goods subsidies. In the previous government, unfortunately, we saw that the government bought the foreign exchange from exporters in the Nima system and then provided it to importers at a rate of 4,200 Tomans, and practically, the difference of this amount in the form of money printing caused inflation a few months later. And liquidity would grow.

3% reduction of the government’s debt to the central bank
At the end of the first month of this year, the government’s debt to the central bank has decreased by about 3% compared to April last year, but its figure is still more than 132 thousand billion tomans.
Monetary and banking experts and economists always emphasize that in order to curb inflation and compensate for its budget deficit, the government must make its debt transparent, in addition to observing financial discipline and reducing expenses. The way to make this debt transparent is also clear, and in all major economies of the world, instead of borrowing directly or indirectly from the central bank or the banking system, the governments issue bonds, and the interest rate of these bonds is a function of the market mechanism instead of the mandated process. It is capital.
The government still borrows indirectly from public and private banks, and part of the government’s financing last year was through indirect borrowing from the central bank.

Non-governmental sector debt to banks and credit institutions
The debt of the non-governmental sector to banks and financial and credit institutions also reached about 3,588 billion tomans in April of this year, which shows a growth of about 48.4% compared to the same month of 1400.
This is despite the fact that the visual and non-visual deposits of the private sector with banks and financial and credit institutions have grown by 39 percent and reached 4,738 thousand billion tomans.
It should be noted that the rate of increase in the debt of this sector is higher than its deposits. In fact, this issue is a warning for the ability of this sector to fulfill its obligations to banks and institutions, and it can turn into another crisis.