Economy experts call for revising bill on CBI structure

July 7, 2021 - 15:49

TEHRAN – A group of economy experts has written a letter to the head of the Iranian parliament’s Economy Committee calling for revising a bill passed on the responsibilities, goals, structure, and duties of the Central Bank of Iran (CBI), IRNA reported.

The parliament had passed the mentioned bill on “CBI responsibilities, goals, structure and duties” in an open session on May 16.

According to the Parliament Economic Committee, this bill is supposed to amend the country’s monetary and banking law approved in 1973; the bill is aimed at preserving the value of the national currency.

The bill is also going to make sure that the central bank would act more independently to be able to monitor and deal with irregularities that are relatively independent of the government.

Economy experts have called for parts of the mentioned bill to be amended, saying that if the reforms are not implemented, the bill will not be effective in reforming the legal structure of the country’s monetary and banking system.

The experts have stressed that the central bank must be independent, powerful, and accountable to be able to control inflation.

According to experts, the conditions of the country's financial sector show that delaying the updating of monetary and banking laws is no longer permissible, and improving the productivity of the real productive sector depends on financial reforms; reforms that include a fundamental review of the legal capacity of the country's financial sector.

They emphasize that in order to strengthen the authority of the CBI governor, his dismissal before the end of his term should be subject to the president's consultation with non-executive members of the supreme board, and only allowed in case of proven negligence in performing duties.

Experts say that in the parliament's bill, credit policy harms monetary policy in the sense that providing preferential credit facilities to certain banking institutions would undermine the independence of the monetary policy.

EF/MA

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