The Effect of Oil Income on Liquidity of Iran: With Emphasis on the Role of Cash Reserve Fund

The structure of Iran’s economy is based on the revenues of oil sale so that the major macro economics variables such as foreign export revenue and then foreign exchange revenue and reserve, imports, budgeting are always set based on it. Hence the effect of this revenue has being surveyed among monetary officials seriously. Iran’s oil revenue causes increasing in foreign exchange reserve or change to the country’s currency in the budget deficit mode and consequently increases liquidity. Because the increase of liquidity has not been by productive activity, it caused so many economic failures in Iran. Using a 50 years time series data of macroeconomic variables, the main purpose of this survey is investigating the degree of effecting liquidity and its component by revenue of oil sale vai an econometric OLS model to verify how the revenue of oil sale motivates the liquidity and it’s components. In this case we can find the ways of managing and programming the revenue of oil sale as an exogenous variable to control the effects of disordered liquidity.