CBI Roadmap to Realize Resistance Economy

The Central Bank of Iran has unveiled a roadmap revolving around three goals to achieve long-term targets envisioned by Resistance Economy, announced the bank's governor.

"Three general medium-term goals of 'price stability and taming inflation', 'creating abiding stability in the financial sector of the economy' and 'decreasing the extent of foreign exchange fluctuations and improving transparency and efficiency of the currency market in meeting production and trade needs' have been set to realize the goals of Resistance Economy in monetary, banking and currency sectors," Valiollah Seif was also quoted as saying by the official website of CBI.

Seif made the statements in an address to a gathering of executives of Khatam-al-Anbia Construction Headquarters–a giant engineering firm affiliated with the country's armed forces.

Resistance Economy refers to a set of principles outlined by the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei aimed at bolstering domestic production, curbing dependence on oil exports, improving productivity and encouraging Iranians to buy domestically-manufactured products.

In analyzing the notion of Resistance Economy, Seif noted that it includes the capability of an economy to respond to different sorts of shocks, ranging from global oil price fluctuations , sanctions, war, social crises and climate change, as well as the extent of their negative influence on various sectors of the economy.  

Noting that Resistance Economy consists of a wide range of economic, social, security, political and environmental components, the CBI chief said the two approaches of making the economy less shock-prone and improving the country's ability to control the repercussions of a shock or a crisis must be pursued.

To do this, Seif stresses that "safeguarding the stability of macroeconomy" should be considered, which is the ultimate goal of implementing the Leader's guidelines.

"Taming inflation and maintaining a stable economic growth are important measures for achieving this target," he said.

"From this perspective, the three conditions of maintaining stability of the government's budget, foreign trade and monetary stability while minding the reciprocal impacts of all three are fundamental prerequisites to create macroeconomic stability and subsequently implement Resistance Economy in the country," he said.

Referring to budgetary stability as one of the main factors in maintaining macroeconomic stability, he said the importance of the matter becomes evident not only as a result of past experiences, but because of recent developments in the Iranian economy.

According to Seif, who also heads the Money and Credit Council, a historically high dependency of the government budget on oil revenues, a lack of a comprehensive system to identify eligible taxpayers, a lack of suitable and diverse instruments to finance  government spending and a gradual increase of the share of state-owned companies in the overall budget "render the necessity of budgetary stability to achieve macroeconomic stability more evident than ever".

On the stability of foreign trade and factors that underline the importance of its role in achieving macroeconomic stability, Seif mentioned the need to reduce the high vulnerability of foreign exchange income linked to oil prices and the "hidden but notable dependency" of production and commercial sectors on imports, while improving accessibility to international money markets and diversifying sources of foreign finance.