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Economic Stability Crucial to Resistance Economy

Economic Stability Crucial to Resistance Economy Economic Stability Crucial to Resistance Economy

Preparing the grounds for “macroeconomic stability” is an essential prerequisite for accomplishing the goals of the Resistance Economy, the results of a study by a specialized committee at the Central Bank of Iran suggest.  

Three sub-concepts of budget stability, international stability, and financial stability have been introduced as the components of the macroeconomic stability by the same study.  

In a roadmap submitted to the Economic Council of the government, the central bank outlined its policies in line with accomplishing the objectives of the Resistance Economy -- a set of guidelines carved out by Iran’s Leader to lessen the impact of US-led sanctions and stimulate economic growth.

The roadmap is devised by a specialized committee, headed by the deputy governor of CBI, established upon the CBI governor’s order, with the aim of implementing the policies of the Resistance Economy in monetary and banking fields, according to the CBI website.

Regarding the novelty of the concept of the Resistance Economy, the committee, in the first place, determined the theoretical foundations of the concept. To this aim, a team of CBI experts conducted a comprehensive study to determine the details of the Resistance Economy.

The result of the study was submitted to the Economic Council in the form of a roadmap.

The objectives and policies outlined in the roadmap include 39 programs and 150 executive actions in the main fields of the activity of the central bank.

 Monetary Policies

According to the conclusions reached by the CBI working groups, in the field of monetary policies, the central bank will focus on avoiding financial repression, as well as considering great macroeconomic variables (especially the inflation rate) in determining interest rates.

The first task of the central bank would be to reduce the gap between official and free market foreign exchange rates, and revising foreign exchange regulations in order to facilitate international trade.

The priorities of the central bank in the field of credit policies include: removing the dominance of the government on the market, reducing the amount of government debts to the banking system, restoring trust of the customers in the banking system, contributing to the financing of small manufacturing units as well as improving the process of micro-financing.

 Supervision

In the field of supervision on the banks and credit institutions, the central bank will mainly focus on organizing unauthorized credit institutions and creating discipline in the money market, reducing the amount of non-performing loans of the banks, improving the quality and quantity of commercial banks’ capitals, and protecting the rights of the shareholders of banks and financial institutions.

 Electronic Banking

In the field of electronic banking, the policies of the central bank will be focused on establishing core banking system -- a banking service provided by a group of networked bank branches where customers may access their bank account and perform basic transactions from any of the member branch offices -- as well as promoting the transparency of banking data in order to boost supervision on the banking network.

 

Financialtribune.com