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Central Bank of Iran allowed to Launch OMO

The policy was approved as part of the CBI plan to implement new instruments in its monetary policy, regulate interest rates, curb inflation, and develop a regulated framework for controlling banks’ borrowings from the CBI
Central Bank of Iran allowed to Launch OMOCentral Bank of Iran allowed to Launch OMO

The Central Bank of Iran’s policy to launch Open Market Operation was officially approved by the Money and Credit Council – a major monetary decision-making body – on Tuesday.  
The policy was approved as part of the CBI plan to implement new instruments in its monetary policy, regulate interest rates, curb inflation, and develop a regulated framework for controlling banks’ borrowings from the CBI. 
OMO is a financial instrument through which central banks buy and sell securities in the open market to expand or reduce money supply. 
Within the OMO, the CBI buys government bonds to increase the money base (cash reserves), thereby reducing inter-banking lending rates. Selling government bonds decreases the base money and raises interbank rates. 

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