Abdolnasser Hemmati, newly appointed governor of the Central Bank of Iran (CBI), has pledged to restore economic stability by taking firm action against loss-making banks, curbing excess liquidity growth and dismantling distortions caused by multiple exchange rates.

Speaking shortly after his appointment, Hemmati said stabilising the economy would be the central bank’s overriding priority, arguing that persistent inflation is primarily rooted in fiscal imbalances and structural weaknesses within the banking system.

“Controlling inflation is the most important responsibility of the central bank,” Hemmati said, adding that while the CBI does not create budget deficits, it is responsible for managing their monetary consequences. He pointed to bank balance-sheet imbalances and excessive liquidity growth relative to economic expansion as the main drivers of medium- and long-term inflationary pressures.

Hemmati said eliminating corruption and rent-seeking created by multiple exchange rates would be a central priority. Iran currently operates several official and semi-official exchange rates alongside a volatile open-market rate, a structure widely criticised for encouraging arbitrage, weakening transparency and distorting prices across the economy.

“Ending the corruption and rents arising from multiple exchange rates is unavoidable,” Hemmati said, adding that exchange rate reform is essential to restoring stability and credibility in monetary policy.

Inflation control, he said, remains the central bank’s most important mandate, with budget deficits and banking sector imbalances identified as the primary underlying causes. While stressing that the CBI does not determine fiscal policy or government borrowing, Hemmati said it has a responsibility to manage and contain the monetary consequences of fiscal shortfalls.

“The central bank does not intervene in the budget deficit itself, but it can and must control its consequences,” he said, referring to liquidity growth, inflation expectations and financial instability.

A key element of his agenda is tighter supervision of loss-making and undercapitalised banks. Hemmati said banks with structural imbalances would no longer be allowed to increase their balance sheets, signalling a shift towards stricter enforcement after years in which weak lenders relied heavily on central bank liquidity and regulatory forbearance.

Hemmati’s appointment was announced after weeks of speculation over the future of the central bank’s leadership, during which rumours of the previous governor’s resignation fuelled volatility in currency and gold markets. Official denials of any resignation were issued earlier on the day of the announcement, before the government confirmed Hemmati’s return to the post.

A former economy minister and a previous governor of the central bank, Hemmati is seen by market participants as favouring tighter monetary discipline, banking sector reform and greater policy coordination. His return comes at a sensitive moment for the Iranian economy, with high inflation, rising government reliance on debt issuance and persistent pressure on the national currency.

Investors and analysts will now be watching closely to see whether the new governor can translate his commitments into concrete action, particularly in restructuring weak banks, narrowing exchange-rate differentials and anchoring inflation expectations in an environment shaped by fiscal strain and fragile confidence.