Iran News ...


8/22/05

Iranian economist warns of soaring liquidity growth rate

Tehran, Aug 21, IRNA-An Iranian economist has warned against a sharp increase in the liquidity growth rate in coming years due to increase in the oil revenues and Central Bank of Iran's inability to exchange petrodollars for rial.

Director General of the Macro Economy Department at the Management and Planning Organization Mohammad Kordbacheh said recently that every one billion dollars that CBI fails to exchange for rial would result in a 5-percent growth in the liquidity rate and 3-percent rise in the inflation rate, Sunday edition of the Persian-language daily `Abrar' quoted a Mehr News Agency report as saying.

Kordbacheh said that if the government fails to clear its debts with the CBI, there will be increase in CBI's foreign assets.

He said the best mechanism to solve the issue is the government's use of the Forex Reserve Fund.

Putting the liquidity growth rate in the Second Five-Year Economic Development Plan (1995-2000) at 25 percent and in the Third Five-Year Economic Development Plan (2000-05) at 28 percent, Kordbacheh warned that national economy will suffer the most from rapid liquidity growth rate.

Kordbacheh said the liquidity growth rate is dangerous for national economy and has always plunged global economy into crisis.

He said the main reason for growth in the liquidity growth rate in the 2004-05 fiscal year was the government's mismanagement of the Forex Reserve Fund and CBI's inability to exchange the hard currencies for rial.

He added that increase in petrodollars in coming months might threaten the national economy.

He said CBI's forex assets, the government's debts and allocation of credits to the private sector had been the reasons for the rise in the liquidity rate.

... Payvand News - 8/22/05 ... --



comments powered by Disqus

Home | ArchiveContact | About |  Web Sites | Bookstore | Persian Calendar | twitter | facebook | RSS Feed


© Copyright 2005 NetNative (All Rights Reserved)