The Necessity of CBI Independence
By Mahdi Goodarzi & Mojde Rezaee
Statistics demonstrates that the inflation rate hovers around 1-3% in advanced economies while it ranges between 3-5% in developing countries, having gone through the following steps to achieve it:
- Tackling the inflation rate problem;
- Deepening their debt market;
- Reforming their banking system; and
- Revisiting their Central Bank (CB) law supporting for its independence.
The current paper reviews the necessity of Central Bank of Iran (CBI) independence, as one of the requisites to maintain the current 1-digit inflation rate.