Ghazizadeh: The granting of extensive facilities has disrupted the market, not the production boom

Speaking about solutions to the current crisis, the deputy speaker of the Islamic Consultative Assembly said: "The government and especially the central bank have almost no monitoring tools to track the funds allocated for the corona." For example, any person can get facilities for his business and buy gold and currency with the same facilities received, so the granting of large facilities has caused a disruption of the market, not a boom in production.

He added: "Continuing inflation has not only made the people's table smaller, but has also made production and economic activity difficult." But the crisis is driven more by a lack of control over money creation and liquidity growth than by economic sanctions. The average growth rate of liquidity in the country in recent years has usually fluctuated between twenty and twenty-five percent, which means that if the volume of what is produced in the country's economy remains almost constant, at least 25 percent of annual inflation to the country alone Liquidity growth is imposed. In other words, when the endogenous growth of our economy is negative, zero or numerical less than two or three percent, the whole increase in liquidity naturally turns into inflation.

The representative of the people of Mashhad and Kalat in the Islamic Consultative Assembly added: During the last year, the growth of liquidity has increased from twenty-four to thirty-one percent. So it is natural for  the nominal value of goods and services produced to increase by thirty percent without  substantial growth value , and that is exactly what inflation means.

Explaining why liquidity is not flowing into production, he added: "In inflation, people do not save money, and savings are not invested." Rather, people's cash assets become relatively more stable valuable assets; That is, real estate, gold, cars, currency, and anything that can protect people's wealth from being plundered by inflation. Therefore, instead of directing liquidity to production, we are witnessing the transfer of a flood of liquidity from one market to another.

Ghazizadeh further stated: The twelfth government has no effective plan to curb the growth of liquidity. At the same time, with the decrease of interbank interest to twelve percent, the increasing monetary coefficient has practically increased and the intensity of liquidity growth has increased. The central bank has fueled monetary expansion by imagining the impact of monetary expansion policy on curbing the crisis of the Corona recession, even though the recession caused by the corona recession has been on the supply side and not just on the demand side. Therefore, with the increase in demand, unfortunately, in addition to the fact that the production volume has not increased, but the doubled liquidity has flowed to the same limited goods and has intensified the growth of prices.

Amir Hossein Ghazizadeh Hashemi, the first deputy speaker of the Islamic Consultative Assembly, pointed to the recent economic turmoil: It must be acknowledged that the problem of Iran's economy is not the dollar, it is the rial.

He said that to reduce liquidity growth immediately, measures such as increasing the central bank's control over banking operations, controlling the impact of facilities on production targets, immediately reducing the incremental rate by increasing interbank interest rates or legal and precautionary reserves so that banks can help create money. It seems necessary to close. Of course, the prerequisite for success in this matter is that the government also has financial discipline and, while controlling spending, tries not to monetize the budget deficit.