The authority and independence of the central bank with the new law

According to Iran EconomistThe latest changes in the monetary and banking law date back to 1351, and it can be said that in the past half a century, there were no changes or amendments in the aforementioned law, and finally last year, this law was put on the agenda of the Islamic Council with the aim of amending the laws of the central bank. In the first days of December this year, the said law was notified to the government by the Speaker of the Islamic Council.

Mohammadreza Farzin, the head of the central bank, announced that the new law has given the central bank relative independence and authority to better perform its duties and is a step forward. According to Farzin, from now on, next to Esteghlal, the Central Bank will have more power to monitor the money market and the banking network.

With the new law of the central bank, in addition to independence, the authority of the monetary policy maker will increase. Increasing the authority of the central bank is achieved specifically through reducing the interventions of other institutions in the policies and measures of the central bank. Accordingly, the monetary policy will reach its correct track.

According to the new law, the central bank can make a decision about a bank that is unbalanced, and if the bank does not take steps to correct its imbalance, the monetary policy maker can liquidate it.

One of the important challenges of the central bank during these years has been the currency market and its fluctuations. The lack of independence of the central bank in currency policy has created many challenges for the government and the central bank, which has been largely resolved in the new law.

In the new law to the Central Bank of this Authority It is given to purchase the currencies offered by the government and the executive bodies subject to Article 5 of the Civil Service Management Law or to assume the agency of their sale. Also, in cases where the central bank buys currency belonging to the government or executive bodies, it should not pay its Riyal equivalent before taking possession of the currency.