Cooperation between the insurance industry and capital market could help control the volume of liquidity, whose rise has triggered concerns in recent years, the head of the Central Insurance of Iran said.

“If that is the case, it can prove immensely helpful to the manufacturing sector of the country,” Abdolnasser Hemmati was also quoted as saying by Shada, the news portal of the Ministry of Economic Affairs and Finance, at a joint event attended by representatives of Iran’s capital market and insurance industry on Monday.

Liquidity exceeded $300 billion by the end of the third quarter of the current year on Dec. 21, according to the latest data of the Central Bank of Iran.

The official stressed the importance of expanding life insurance policies and directed insurers to invest in the nascent category in major manufacturing units listed on the capital market to spur growth.

Hemmati noted that high interest rates have encouraged people and insurance companies to make deposits in banks.

“About 55% of the resources of the insurance industry are currently deposited in banks and that is a major problem that requires consultations at the macro level,” the CII chief concluded.

Source:

2018, Insurers-Capital Market Coop. Could Tame Liquidity, Tuesday, February 27, p.1,<https://financialtribune.com>