Iran's liquidity, its broad money supply, passed 19,000 trillion tomans at the end of the Iranian month of Mehr (23 September–22 October 2026). Abdolnaser Hemmati, governor of the Islamic Republic's Central Bank, said on Thursday 29 October that monthly liquidity growth reached 2.7% in Mehr, more than double the 1.3% recorded in Shahrivar, the month before.
According to Hemmati, liquidity grew 24% in the first seven months of the Iranian year. Year-on-year growth, meaning the increase in the money stock compared with Mehr last year, is about 51%. Put simply, the amount of money circulating in Iran's economy has grown to almost one and a half times its size in a single year.
Liquidity growth and inflation
Liquidity growing this fast is the main force behind the inflation people see in the price of bread, medicine and rent. A few days ago the Islamic Republic's Statistical Centre put year-on-year inflation for Mehr at 88.7%, and year-on-year inflation in rural areas passed 100%.
Hemmati named the imbalances at some banks as one of the obstacles to reining in liquidity and said a plan to fix these banks is on the agenda. The Central Bank had earlier presented caps on the growth of bank balance sheets and a tougher line on their overdrafts as its tools for controlling money creation, but the Mehr figure shows these tools have not slowed the growth of money.
Budget deficit in a year of war and blockade
In a year of war, a naval blockade of its southern ports and a steep fall in oil revenue, the Islamic Republic has leaned more than ever on banks and on printing money to pay for its spending. Meanwhile, the Pezeshkian government has handed the power to set petrol and gas prices to a special working group and does not have the money to rebuild the destroyed homes in Tehran.
Iran's liquidity has grown about 51% in one year, and in Mehr its monthly growth rate doubled.
Comments
No comments yet. Be the first.