Estimating the Net Impact of Central Bank Foreign Assets on Inflation in Iran Using Quantile Regression

The balance sheet of the country's banking system, especially in recent years, has faced increasing imbalances due to the continuous accumulation of net foreign assets on the central bank's asset side. In fact, this imbalance in the banks' balance sheets can directly and indirectly affect the volume of liquidity. On the other hand, high liquidity is one of the factors influencing inflation, and inflation, in turn, has been one of the most significant challenges of Iran's economy in recent decades. Therefore, this study investigates the relationship between the central bank's net foreign assets and inflation from ۱۹۹۱ to ۲۰۲۲. It is worth noting that this period includes both the fictitious and frozen assets after the revolution and reflects significant economic developments during this time. To achieve quantitative results, the quantile regression model has been used. Based on the findings, the increase in the central bank's net foreign assets, exchange rate fluctuations, and sanctions have a positive and significant relationship with inflation. In contrast, financial market openness, although it may initially seem to have a positive effect, shows a significant and negative relationship with inflation. Thus, the results indicate a complex relationship between various variables and inflation in Iran's economy.

کلیدواژه ها:

Central Bank's Net Foreign Assets ، Sanctions ، Exchange Rate ، Inflation ، Quantile Regression