Why is economic stabilization important?
According to the financial and financial news report, quoted by the public relations of the central bank, “Mohammadreza Farzin”, the head of the central bank, stated in this note: The deep financial crisis of 2007 and 2008 was the result of economic deregulation in the 80s and 90s. This caused economic stabilization policy to be analyzed and analyzed in academic circles, especially the relative superiority of the fixed exchange rate system against the floating exchange rate. Finally, this discussion in academic circles caused many countries in the world to seek to stabilize the exchange rate in the form of a fixed exchange rate system.
In economic literature, what we know as stabilization policy refers to the policies and measures designed by the government and the central bank during periods of economic instability (including things like recession, inflation, unemployment, debt crisis, etc.) with the aim of restoring stability to the economy. are adopted
Iran’s economy has always been exposed to many instabilities, especially in recent years. In the meantime, the formation of successive currency crises in Iran’s economy has caused the instability of the exchange rate to be recognized as one of the most important factors of economic instability.
In this situation, the need to adopt economic stabilization policies will become more visible to everyone; Because economic stabilization is necessary for the implementation of reform policies, and we can talk about reform policies when, first of all, the economic conditions of the country are in a stable and stable state.
Therefore, the central bank’s mission as the country’s largest monetary and currency institution requires that it intervene and take necessary measures in the role of a policy maker in order to control fluctuations and return stability to the economy.
In the current situation, the instability in Iran’s macroeconomic variables causes the risk and uncertainty of economic activities to increase. As a vicious cycle, this will weaken the supply side of the economy and intensify instability; Therefore, in this situation, creating a stable and predictable environment will be one of the most important axes to strengthen the supply side of the country’s economy.
Based on this, the Central Bank of the Islamic Republic of Iran, with the beginning of the new year and with the aim of returning stability to the country’s economy, its activities under the title of economic stabilization policy in the three main axes of “stabilizing and predicting the foreign exchange market”, “liquidity control” And he started “strengthening the regulatory system in the financial markets (money, currency and credit)”.
In this regard, one of the most important actions of the Central Bank to adjust the negative expectations in the foreign exchange market and overcome the fears and worries that have arisen in the society, are measures such as providing the currency needed for the import of basic goods under the Nima system at the rate of 28,500 tomans per per US dollar, reducing the multiple exchange rates to three rates in the country’s foreign exchange system (basic goods remittance rate, ETS banknote and ETS remittance), setting up an exchange center for Iranian currency and gold, amending the executive order for selling currency notes by depositing into a foreign currency bank account Allocation of travel currency to passengers after the airport gate, reduction of the return time of exported currency, cooperation and coordination with ministries and other institutions, marginal intervention in the informal currency and gold market through selling currency to individuals and offering coins in the commodity exchange, etc. Cited.
Therefore, as it can be seen from the statistics and figures, what has been observed so far in the country’s economy as a result of the aforementioned measures is the establishment of relative calm in the inflamed environment of the exchange rate and the return of relative stability to the country’s economy; But the point that should be mentioned at the end is that the scope of actions of the central bank will not be limited to the mentioned actions.
In its future plans, this institution will take actions such as reforming foreign currency buying and selling policies, developing the Iranian currency and gold exchange center, creating a stabilization fund to help stabilize the exchange rate when necessary, improving the operational supervision of the activities of the trusts and the active management of the central bank, as well as strengthening And the development of interactions with neighboring countries and business partners to use their capacities in financial facilitation of mutual exchanges, etc. has been put on its agenda.
It is hoped that by following these measures by the Central Bank and the cooperation of other executive institutions of the country, we will see more peace in the economic atmosphere of the country.