Economy, Business And Markets

MCC’s Decisions, Gov’t Dependence Censured

MCC’s Decisions, Gov’t Dependence CensuredMCC’s Decisions, Gov’t Dependence Censured

A n economist has criticized the Money and Credit Council for “being dependent on the government” and “lack of technical expertise” among its members, Banking and Insurance News Agency (BINA) reported on Saturday.

“All around the world, it is the central bank that advises the government on monetary policies while in Iran an important decision-making body, the MCC, is fully under the control of the government,” Abbasali Abou Anvarim, former dean of the faculty of economics at the University of Tehran said, regretting that the principles of central bank’s independence have not been enshrined in the regulations and the extent of government’s intervention remains unclear.

He blamed the 2012 currency crisis on the lack of expertise among the MCC members, saying that such entities as the MCC are usually advised by the central banks, “but in Iran the entity works under the central bank.”

Abou Anvarim also questioned the council’s recent decision that led to a decline in the interest rates. “The new rates lack scientific justification and have borne no impact on the capital market, while in other parts of the world any changes in interest rates would immediately affect the capital market.”

He further noted that interest rate cuts should normally reduce production costs, boost economic growth and affect the capital market in a positive way. But he regretted that In Iran, the capital market is more influenced by political parameters than economic reality.

The criticism comes as the central bank governor, Valiollah Seif, seeks assistance from “independent auditors” to improve transparency of the banking system.

In an address to a conference held this week on the role of accounting in the resistance economy -- a set of guidelines proposed by the Leader of the Islamic Revolution Ayatollah Seyed Ali Khamenei to counter sanctions, promote domestic growth, and reduce reliance on oil revenues -- at the University of Tehran, Seif highlighted the need for a professional auditing community. He expressed hoped that closer cooperation between independent auditors and economic and financial institutions could address corruption and resolve the complicated problems facing the economy.