Decline in Monetary Pressure and Inflation

The year-on-year growth of liquidity in Mehr 1405 (October 2026) decreased by 0.7 percentage points compared to Shahrivar (September) to reach 50.9%. This figure represents the lowest liquidity growth in the past eight months and the fourth consecutive decrease in this index after peaking at 56.7% in Khordad (June). Thus, the liquidity growth rate has decreased by 5.8 percentage points over the past four months, with the total liquidity volume reaching approximately 19,320 trillion tomans. Despite the decline in liquidity growth, the continued high growth rate in a context of negative economic growth still indicates inflationary pressures in the economy, although the intensity has diminished. The imbalance of some banks, budget deficits, and increasing political risks are among the factors affecting money creation and complicating liquidity control. On the other hand, the halt in the publication of detailed monetary and banking statistics for over seven months has limited the ability to more accurately assess developments in this sector. The sustainability of the downward trend in liquidity growth depends on monetary and fiscal reforms and reducing non-economic uncertainties. Economists believe that the continuation of this decreasing trend is primarily linked to the stability of monetary policies and their coordination with government fiscal policies. In this context, budgetary discipline and preventing the financing of budget deficits through banking or central bank resources play a crucial role in preventing a return of monetary pressures. Additionally, achieving projected oil revenues and accessing resources from its exports can reduce pressure on government financial resources and limit the need for borrowing from the banking network. Alongside these factors, restructuring insolvent banks, controlling their overdrafts from central bank resources, and improving the quality of banking assets are essential for curbing money creation. In fact, a sustainable reduction in liquidity growth cannot be achieved solely by limiting bank loans but requires addressing the financial and structural roots of money growth in the economy.