Directive Control of the Market; Central Bank's Powers Increased Again

The powers of the Central Bank of the Islamic Republic of Iran were increased on Saturday with the aim of "creating economic stability and preserving the value of the national currency" during a meeting of the Supreme Economic Coordination Council of the heads of the three branches of government. This comes after the same council had previously approved the Central Bank's requested powers on February 25, 2023, to "preserve the value of the national currency and control inflation." However, the result of this increase in powers did not lead to scientific and practical action in the currency market. Following this, on March 26, a member of parliament reported the approval of a law increasing the powers of the Central Bank, stating that this law would take effective steps to curb inflation and control liquidity. The IRIB news agency quoted Mohammad Taqi Naqdali as saying, "The most important problem of the country and the people relates to livelihood issues and specifically inflation, and the parliament will take any necessary legislative and supervisory action to control inflation." Despite all these increased powers, the Central Bank has been unable to control the exchange rate in recent months, with the price of the dollar fluctuating around 50,000 tomans after recording a peak of 60,000 tomans. The performance of the Central Bank over the past six months has been such that the website 'Asr Iran' reported on February 27 that, "Over the past year, the value of the Afghani against the dollar has remained stable and even slightly strengthened, as the price of one dollar was 91 Afghanis last year, and today it has decreased to 89 Afghanis." The website further emphasized: "It is suggested that the officials of the Ministry of Economy and Mr. Farzin, the head of the Central Bank of Iran, take a trip to Kabul and ask Mr. Haji Mohammad Idris, the head of the Central Bank of Afghanistan, and other economic officials of the Taliban to share their knowledge and experience in maintaining the value of the national currency under harsh sanctions. What is wrong with Muslims learning from each other?" Farzin announced the direct and exclusive buying and selling of dollars by the Central Bank. The average loan for employees of some banks in Iran reached 847 million tomans. The challenge of currency transfer continues; the Central Bank of Iraq does not allow the transfer of dollars to Iran. Efforts to control the currency market continue; the head of the Central Bank of the Islamic Republic stated that entering the informal currency market is "equivalent to money laundering."