Economy, Business And Markets

CBI’s $4.1b Gaffe

CBI’s $4.1b GaffeCBI’s $4.1b Gaffe

Parliament’s budget and planning committee has supported the government saying that it did not withdraw $4.1 billion from the sovereign wealth fund as claimed by a report earlier.

On Tuesday, the committee reported its findings on the matter to the parliament in an open session, according to ISNA. Recently a parliamentary report claimed the government made a large withdrawal from the National Development Fund of Iran.

The committee acquitted the government of any wrongdoing and said the whole issue was about “a misplacement of documentation.”

It is still unclear how a mistake of such magnitude could be made by the Central Bank of Iran (CBI).

Accordingly the panel said that the central bank issued a document showing a $4.1 billion withdrawal from the NDFI on March 13, 2014. Two days later, the CBI revised the document. It is also unclear how many people at which levels of the government were involved in the mistake.

The committee added that investigations into the details of the matter are ongoing and the Supreme Audit Court of Iran is helping the parliament in this regard.

In short, the central bank mistakenly documented a withdrawal from the NDFI. The Supreme Audit Court of Iran found out and informed the parliament and the CBI. The CBI corrected the document. The parliament accused the government of breaking the law by misusing public funds. The government denied all wrongdoing and asked for a formal apology by the MPs. And now the parliament accepted no withdrawal took place but still says there are causes for concern.

In December the CBI’s governor, Valiollah Seif, said the central bank bought $4.1 billion from the government at the end of the previous fiscal year. The purchase raised money supply but also helped bring the economy out of recession, Seif added.