Adoption
and implementation of monetary policies:
As the co-ordinator of monetary and credital policies,
central bank has both the adopting and supervisory
duties of successful implementation of the mentioned
policies. The main goal for exertion of such policies
includes the efficient co-ordination of existing
supplies and demands of financial sources within
country's economy as a whole, in a way which facilitate
the accomplishment of country's stated goals for
economic development programs.
Due to various phenomena, such as necessary adjustments
made in foreign exchanges and extensive investment
activities of governmental and private sectors
in producing and infrastructural areas, generally
demands for cash money (cash flow) within country's
economy greatly increased in recent years and
consequently the crucial task of adoption of new
monetary policies was again granted to the Central
Bank. Thus, to balance the government's budget
the Central Bank not only attempted to base the
new monetary policy on restriction of the growth
of cash money, but also in 1994 introduced the
following measures to implement the newly stated
policy.
The
Banking system's performance in 1994:
Setting certain ceiling for Banking services and
facilities, transferable to governmental, private
and cooperative sectors by the country's Banking
system.
Allocating larger amounts of Banking credital
services to non-governmental and private sectors,
in such way that the largest share (equal to 36%)
would be allocated on mines and industries, 30%
on construction and housing sectors and the remaining
15% would cover the exports, service and commercial
sectors.
The minimum and maximum interest rates for granted
Bank loans and services to various sectors in
1993 remained unchanged, just like that of 1993
(agricultural sector 12-16%, industries and mines
16-18%, construction - 15%, as well as service
and commercial sector 18-24%).
The Banking system (in 1993)
demonstrated a remarkable performance and an appreciable
success both in absorbing the country's deposit
sources and allocating the available resources
on various economic sectors, in accordance with
its annual targeted goals.
Through implementation of necessary
monetary and credital policies in 1994 the growth
rate of cash money (cash flow) practically showed
a lower figure, only 28.5% as compared with 34.2%
of the previous year, and at the end of the same
year the volume of cash money also included 61844
billion Rials. Such considerable decrease, considering
the governmental and private sector's needs for
more cash money for the execution of numerous
investment projects, certainly marked yet another
outstanding achievement of the Central Bank in
implementation of 1994's monetary policies. More
importantly, due to the public trust in country's
Banking system, the Banks attempts for absorbing
the needed deposits were fruitful and thus great
volumes of deposits were entrusted to numerous
banks nation wide by the end of 1994 fiscal year.
Also the share of current Bank notes and coines
in circulation decreased to almost 14.1 in 1994,
indicating the lowest ratio during the previous
20 years. |
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