The effect of FATF assignment on reducing inflation expectations

According to IBNA; Dr. Hemmati, the Governor of the Central Bank, in his latest Instagram note, pointing out that the central bank’s policy compass is around controlling inflation and helping the country’s economic growth, added: “In this regard, the exchange rate plays an important role as a key macroeconomic variable.”

In another part, he referred to the request of the government and the approval of the Supreme Leader to extend the deadline for reviewing the Palermo and CFT bills in the Expediency Council and stressed: Be international.

In this regard, Dr. Kamil Taybi, economist and professor of economics at the University of Isfahan, in an interview with IBNA, pointed to the impact of FATF bills on inflation expectations in society and added: “The impact of this key factor, along with the possibility of US return to BRJAM, could lead To moderate the upward trend of inflation.

He emphasized: in other words; The possibility of the US returning to the UN Security Council is a very important factor that can make the UN Security Council more prominent and reduce the effects of sanctions, and naturally pave the way for the reopening of export routes, especially oil and non-oil. As a result, if these two factors are met, the inflammation of prices in the market will be much less.

Pointing to the positive impact of the possible approval of the FATF bills, the return of the United States to the UN Security Council and the reduction of international tensions on the economy, the economist said: “Assuming the realization of these important factors, we can reduce the exchange rate and then stop rising inflation and adjust.” We witnessed inflation expectations in our country’s economy.

Referring to price stickiness in the economy, Taybi added: “If the current context and opportunities are taken into account, we can expect a stable situation for the next one to two years.” In general, with the realization of the above-mentioned cases, it is predicted that the growth of inflation rate or increase of exchange rate will not be sudden and will have a smoother trend, and as a result, the ground and opportunity for this government and the next government. It makes better decisions and, more importantly, for businesses, industries and the private sector to think more calmly about investing and boosting their production capacity.

In another part of his speech, the professor of economics pointed to the negative consequences of inflation on the economy and people’s livelihood, and said: “When there is inflation, there is profit and rent-seeking for some people.” On the other hand, the producers’ access to intermediates and factors of production decreases, because the producer’s costs increase, so the quality and quantity of the goods suffer.