The authorized methods of the central bank for managing foreign exchange reserves were determined

According to Iran Economist, in the first public session of the Islamic Council today (Tuesday), the representatives of the Islamic Council continued to review the second report of the Economic Commission regarding the banking plan of the Islamic Republic of Iran and approved articles 43 and 44 of this plan and article 42 They referred it to the Economic Commission.

According to Article 43 of this plan, the central bank can use all kinds of monetary and currency policy instruments approved by the Supreme Board, whose legitimacy has been approved by the Jurisprudence Council, in order to achieve the goals of its monetary and foreign exchange policies, in the form of existing laws. The design and application of monetary and currency policy tools must be approved by the Islamic Council.

The representatives of the Islamic Council referred Article 42 of this plan to the Economic Commission for review and resolution of ambiguity.

According to Article 44 of this plan;

A) The country’s currency system is a “managed float”. In order to achieve the goal mentioned in part (4) of clause (b) of article (3), the central bank is obliged to manage the foreign exchange market in such a way that while maintaining the real value of the national currency and reducing the fluctuations of the exchange rate, the competitiveness of the country’s production is maintained. The central bank can intervene in the foreign exchange market and buy or sell currency, currency-based securities or currency derivatives in order to realize its foreign exchange policies. Any purchase and sale of currency, gold and securities based on them by the Central Bank must be done at the market rate and within the limits determined by the Supreme Board.

b) The central bank can purchase the currencies supplied by the government and the executive bodies subject to Article (5) of the Law on the Management of State Services approved on 7/8/1386 or assume the agency of its sale.

c) 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. The

t) In cases where the central bank assumes agency for the sale of currencies belonging to the government or executive bodies, the acceptance and agency of the purchase or sale of currencies belonging to the government by credit institutions is allowed within the framework approved by the Supreme Board.

(e) The central bank is obliged to manage its foreign exchange reserves. The framework governing the amount, composition and quality of foreign exchange reserves in a way that does not conflict with the goals of the central bank and at the same time the currency portfolio at the disposal of the central bank, taking into account the conditions and requirements of the country, the most security, liquidity and efficiency and the least risk. ) is determined by the Supreme Board.

c) The permitted methods for managing foreign exchange reserves by the central bank are:
1. Buying and selling currency and currency-based securities;
2. receiving or granting foreign exchange facilities in compliance with the relevant laws;
3. Buying and selling bullion, pure gold and other precious metals;
5. Opening and maintaining accounts with international financial institutions, central banks and foreign credit institutions;
6. Account opening for international financial institutions, central banks and foreign credit institutions;
7. Using other methods approved by the Supreme Board.

c) The central bank is obliged to provide the necessary grounds for concluding bilateral or multilateral monetary agreements, with the aim of increasing the resilience of the country’s economy, in accordance with the general policies of the system and the laws approved by the Islamic Council. The

h) The instructions for issuing and trading currency-based financial instruments and currency derivatives will be notified by the Central Bank after the approval of the Supreme Board. These guidelines are mandatory for all relevant parties, including institutions, self-regulatory organizations, financial institutions, issuers and other securities market participants. The

Also, the representatives of the Islamic Council referred part 4, paragraph C of this article to the Economic Commission for review and resolution of ambiguity.