The Iranian government's debt to the Central Bank of Iran jumped 98.5% over 12 months to IRR6.6 quadrillion ($52.4bn) by the end of Mordad 1404, driving a 14.5% surge in the monetary base, Banker reported on December 8.

Government borrowing from the central bank accelerated sharply in the Iranian year 1404, rising 25.7% in just five months from IRR6.8 quadrillion at year-end 1403 to IRR8.55 quadrillion by the end of Mordad, according to the central bank's latest monetary and credit variables report.

The borrowing pace contrasts with growth of just 3.8% in the same period last year, highlighting increased government reliance on central bank financing in 1404.

Total public sector debt to the Central Bank of Iran reached IRR8.55 quadrillion by the end of Mordad 1404, comprising IRR6.6 quadrillion in government debt and IRR1.95 quadrillion ($15.5bn) owed by state-owned companies. State company debt rose 22.2% over 12 months but fell 1.6% in the first five months of 1404.

Government debt to commercial banks hit IRR16.46 quadrillion ($130.6bn) by the end of Mordad, up 25% in five months and 30.1% year-on-year. Of this total, IRR15.82 quadrillion represents government borrowing whilst IRR640trn ($5.1bn) comes from state companies, Banker reported.

State company debt to banks plunged 73.7% over the period.

The central bank's net claims on the public sector rose 17.5% in the first five months of 1404, directly driving the 14.5% surge in the monetary base and highlighting the government's role in monetary expansion.

Bank debt to the central bank fell 25.1% to IRR8.75 quadrillion by Mordad 1404 from IRR11.7 quadrillion at year-end 1403. Point-to-point growth in central bank claims on banks slowed to 24.8% in Mordad 1404 from 40.3% a year earlier, suggesting disciplinary policies are working.