دکتر همتی

In a note, Central Bank governor outlined some points about monetary variables

IBENA- Dr. Hemmati wrote in an Instagram note: Today, a Central Bank's December analytical report was published. There are two statistically significant facts in this report:

1- 15.5% growth of the monetary base in the first 9 months of this year.

2- Stopping the growth of "money" in December and a 10.3% decrease in the twelve-month growth of this variable in December compared to November.

Here are some key pointers in moving forward with this statistic:

✓ Stopping growth of "money" and reducing its twelve-month growth in December compared to November is an important sign of declining inflation expectations.

✓ Controlling growth of "monetary base", despite unprecedented economic conditions and more pressure to Central Bank, although not desirable for Central Bank, but first: growth of monetary base and liquidity should be considered according to the conditions, and second: Central Bank to improve control on growth of monetary variables, it has announced restrictions on the growth of banks' balance sheets from January in this year to use what is possible to control inflation.

✓ Today, the most important achievement of economics in field of policy-making is recognizing roots of inflation and curbing it. This has been result of three important and key changes;

1- Fiscal policy should be based on a specific rule.

2. Monetary policy should be independent and focused on its clear legal objectives.

3. Central Bank is committed to the goal of sustaining inflation.

In order to achieve these changes, in countries with significant success in curbing and controlling inflation, legislatures have allowed any interference and domination of monetary policy from various institutions and, in particular, have made Central Bank in charge of monetary policy and, therefore, Central Bank independence has taken on a legal and binding form.


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