According to Fatemeh Bagheri, Editor-in-Chief of TitrSanat News Agencymonetary indicators Iran’s economy It indicates that liquidity volume increased from approximately 6,388 thousand billion tomans in 2021 to nearly 10,166 thousand billion tomans in 2023, and then reached about 121,515 thousand billion tomans by Mordad 1404 (August 2025). In other words, liquidity has nearly doubled in less than three years, while in the first five months of 1404 alone, it recorded growth of around 18 percent compared to Esfand 1403. This acceleration is further reflected in a year-on-year growth rate of 36.6 percent. Liquidity Compared to Mordad 1403 (August 2024), this is assessed as the highest rate in the past three years and, according to many analysts, serves as a warning sign of a potential return of more severe inflation in the coming months.
the monetary base in Iran’s economy
At a deeper level, the monetary base, also known as high-powered money, has followed a similar but more concerning trajectory. It increased from 855 thousand billion tomans in 2021 to approximately 10,395 thousand billion tomans in 2023, and then reached 1,557 thousand billion tomans by Mordad 1404 (August 2025). This reflects growth of 14.5 percent compared to Esfand 1403, and more than 30 percent relative to Mordad of the previous year.
The sharp increase in the monetary base is largely explained by the growth of government debt to the Central Bank and the frequent use of treasury overdrafts, to the extent that the government’s debt to this institution has nearly doubled within just one year leading up to Mordad 1404 (August 2025).
The Role of Money in Iran’s Economy
The composition of liquidity has also shifted toward more liquid money. The volume of “money” surged from around 391 thousand billion tomans in 2021 to over 1,960 thousand billion tomans in 2023, and further to 2,689 thousand billion tomans by Mordad 1404 (August 2025). Meanwhile, the growth of “quasi-money” has been slower, pushing the ratio of money to total liquidity up to approximately 26–27 percent.
The rising share of demand deposits and cash indicates that households prefer to hold their resources in current and short-term accounts, rather than long-term deposits, keeping them readily available for entry into foreign exchange, gold, and housing markets. This behavior reflects a lack of confidence in price stability and the negative real returns on bank deposits.
The Share of Debt in Iran’s Economy
After rising in 2021 and 2022, it declined from 1,175 thousand billion tomans in 2022 to 1,157 thousand billion tomans in 2023, and ultimately to 876 thousand billion tomans by Mordad 1404 (August 2025), representing a decrease of approximately 25 percent compared to Esfand 1403.
Official data also confirm that by tightening discipline on banks’ overdrafts and increasing the government’s reliance on direct credit lines, the Central Bank has shifted the burden of high-powered money creation away from banks and onto the government’s budget deficit. This change has altered the risk composition but has not eliminated the inflationary burden.
With successive jumps from 564 thousand billion tomans in 2021 to 757 thousand billion tomans in 2022, 861 thousand billion tomans in 2023, and more than 1,481 thousand billion tomans by Mordad 1404 (August 2025), a clear picture emerges of the growing dependence of the government budget on bank borrowing. Experts warn that the continuation of this trend, alongside rapid liquidity growth and the rising share of money within its composition, will entrench a long-term outlook of chronic inflation and high interest rates in Iran’s economy in the years ahead, unless accompanied by structural reforms in the budget, the banking system, and exchange rate policy.
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