Iran Central Bank shall get independent!
– On the 7th conference on Monetary Policies and Challenges Ahead Iran Banking Sector and Production held yesterday, the modernization and independence of the Iran Central Bank were deeply discussed. Resorting to examples like the operation of non-regulated financial institutions plus the divergence between the interest rate on banking deposits and the declining inflation rate to stress on the necessity of the CBI independence, lecturers raised the question whether the CBI had the required structure and authority to prevent such problems in the first place or not. The existing credit crunch also drove banks towards the CBI for help, which itself, limited the CBI maneuvering power in adopting the right monetary policies. Experts, then, referred to the measures affecting the forex market, which were never in complete control of the CBI, that limited this body’s options to curb inflationary expectations even more. Under such circumstances, it is obvious that lowering the interest rate on banking deposits will bring about forex market fluctuation risk, which might turn into a disaster with the slightest shocks in regards with foreign countries and seasonal events affecting supply/demand for foreign currency. Finally, the problems and challenges ahead were discussed from a legal point of view and the conference ended with proposals on the required changes to facilitate reforms providing grounds for implementation of such plans.