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Iran: Expediency Council to look into workings of central bank to defuse row

Source: Tabnak, Tehran

Expediency Council will examine the disagreement between the Majlis and the Guardian Council over the makeup of the central bank general assembly and its independence from the administration, announced EC Secretary Mohsen Rezaii. The Expediency Council has been set up to resolve conflicts and disagreements between the parliament and the Guardian Council.

Decision-making on the running of the central bank requires further expert debates. "We have already started deliberation on the issue and the results will be announced within one month," Mehrnews quoted Rezaii as saying on Tuesday.

Rezaii, a graduate of economics, defended the independence of the central bank, but he said the body should have interaction with the administration.

The central bank should have the authority to make policies and regulations independently, but the administration should have a role in appointing and removing the directors of the central bank, he commented.

The recent ratifications on the central bank by Majlis have triggered a row between different branches of the government over the way this major financial body should be run.

On January 5, the Majlis ratified a bill stating that lawmakers must endorse the election of the central bank governor after the election of a candidate by the bank's general assembly, a move which failed to win favor with the president.

President Mahmoud Ahmadinejad expressed disapproval of the Majlis ratification calling for the revision of the process to select a central bank governor.

"It is not the right path for the Majlis to approve a law to limit the authority of the president and the executive branch of the government," Ahmadinejad said, adding the decision "contravenes the constitution" and "will have negative repercussions."

Ahmadinejad also said the president should implement the economic plans, and the central bank is a tool in the hands of the president to regulate markets and the national economy, so if other branches of the government interfere in the central bank's affairs, many problems are created for the country.

... Payvand News - 01/19/11 ... --

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