Inflation rate to drop to 17% by yearend

Tehran, Dec 17, IRNA – Governor of the Central Bank of Iran (CBI) Valiollah Seif said the inflation rate will drop to 17% by the end of the current year adding that one of the major achievements of the government in the past 18 months has been the outstanding reduction of inflation rate through development of calm and stability in the economic environment.
  Speaking at a session here, he said effective and expert measures of the government in the field of economy resulted in bringing down the inflation rate from 42% last year to the present level.

In addition, he further remarked, in the light of government efforts the negative economic growth in the past two years turned positive in the first quarter of the current year which prepared the ground for harnessing inflation and booming economic and production activities.

Seif noted that during the same period fluctuation rate of hard currency dropped by 74% in the market which provided a good condition for long-term investment of the private sector in industrial and economic fields.

He continued by saying that the inflation rate next year will drop much lower than the current year and expressed hope that in the next two years it will become one digit.

In another development, governor of CBI pointed to the payment of 1770 thousand billion rials by the banking system to different sectors of economy by the end of Mehr (September/October).

Addressing a session of managing directors of the banks with first vice-president, he said it had been recommended that 60% of bank facilities be allocated to the working capital and according to the information collected 59.8% of the facilities have been paid for this purpose.

He said performance of the banks during the first seven months of the current year (started March 21) shows that the banking system has undertaken its responsibility up to the level it has been commissioned to.

He said plans should be made as such banks can direct all their capabilities in supporting production activities of the private sector and in case the government has certain plans it can implement it through mechanisms of the budget.



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