![\"18211558_303\"](\"https:\/\/www.ncr-iran.org\/en\/wp-content\/uploads\/sites\/2\/2017\/03\/18211558_303.jpg\" "\\"18211558_303\\"")
<\/p>\n<\/p>\n
NCRI –\u00a0With the Persian year coming to an end, various analysis on Iran\u2019s critical economic situation in different sectors has been offered by economic newspapers and websites.<\/p>\n
In a report on the stock market, the state-run Taadol newspaper writes \u201cthis wasn\u2019t a good year for many of the shareholders in the stock market. A year which started with optimism and hope, though it doesn\u2019t sound like it\u2019s going to have a good ending. Market liquidity trapped in inactive symbols, longtime absence of bank stocks and their reopening with heavy falls, losses made by big companies, high interest rates, asset freezing, and even political risks joined hands to make the market lose momentum. No doubt, it would be quite irrational and unrealistic to expect all these issues to be resolved soon.\u201d<\/p>\n
Meanwhile, assessment of market liquidity which has actually led to a deeper recession, has been raised as a serious issue.<\/p>\n
The state-run Eghtesadnews website writes in this regard \u201creduced volume of retail transactions below 100 billion tomans due to various factors, the most important of which is inactivity of major indices, is regarded as a serious sign of significant weakening of cash flow in the stock market. This has turned into the market\u2019s major problem in recent days (state-run Eghtesadnews website, February 26, 2017)<\/p>\n
There\u2019s no conclusive report on the situation of money market, or banks for that matter. However, regime\u2019s Minister of Industry said earlier this week that \u201cmoney-lending and interest-receiving have crippled the banks.\u201d Nematzadeh explained that \u201cthe banks across the world set their profits based on the services they offer, whereas we want to move ahead just through money-lending and interest-receiving.\u201d<\/p>\n
\u201cConsidering the current situation, our efforts will unfortunately yield nothing as we\u2019re faced with fundamental problems\u201d, he added, \u201cfor example, it takes a year to open an LC, whereas it should normally take only a day. This leads to reduced capital productivity.\u201d (State-run ISNA news agency, March 2, 2017)<\/p>\n
A more notable issue, however, is an important remark made by a regime\u2019s expert regarding the state of the banks. Asghar Abolhassani, head of Expediency Council\u2019s monetary and banking committee, said that \u201cbanks\u2019 non-current receivables have reached 110 thousand billion tomans, but that\u2019s its structure which is more notable.\u201d<\/p>\n
\u201cA classification of banks\u2019 non-current receivables reveals that the share of doubtful and unrecoverable receivables, which are considered as a red light for banks, have reached more than 60 percent, which is a big challenge for the banking system\u201d, he added, \u201cAccording to international standards, capital adequacy needs to be at least 8 percent, whereas the average amount of capital adequacy in Iran\u2019s banking network is 5.5 percent, and it\u2019s even negative for some commercial public banks.\u201d<\/p>\n
\u201cThe amount of banks\u2019 debts to the Central Bank are so high that the Real-Time Gross Settlement system of some banks has been interrupted, with their accounts in red state\u201d, he said.<\/p>\n
Abolhassani also pointed to government\u2019s debts to the Central Bank and the banking system, saying \u201cwe need to be careful about debts. Since if we constantly inflate the debt market in such a situation so that it turns into a significantly large market, it would then become uncontrollable, and it\u2019s feared that the 2008 financial crisis in the United States which also spread to Europe would be repeated in our economy.\u201d (state-run Fars news agency, March 2, 2017)<\/p>\n","protected":false},"excerpt":{"rendered":"
NCRI – With the Persian year coming to an end, various analysis on Iran’s critical economic situation in different sectors has been offered by economic newspapers and websites. In a report […]<\/p>\n","protected":false},"author":10,"featured_media":48256,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[175],"class_list":{"0":"post-22324","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-updated"},"yoast_head":"\n