Title: “Monetary Policy in the Post-War Era: Balancing Stability and Growth”
Former Central Bank Chief Highlights Challenges of Command Economy
The former Governor of the Central Bank has weighed in on Iran’s current monetary policy landscape, emphasizing that a command-driven economic approach has led to compounding challenges across various sectors.
Interest Rate Suppression and Inflation Concerns
Addressing the issue of artificially suppressed interest rates—a hallmark of command economies—he noted that while inflation hovers around 40%, bank interest rates remain capped at approximately 20%, a disparity he described as unsustainable.
“This imbalance means depositors are effectively bearing the cost for the broader economy,” he explained.
Gradual Reforms Over Sudden Shifts
When asked whether interest rate adjustments could be implemented abruptly, he cautioned against drastic measures, stating:
“I don’t believe we can make immediate decisions on interest rate policies at this stage, but we must begin steering in that direction.”
Priorities for Monetary Policy
Reflecting on what his top priorities would be if he were still at the helm of the Central Bank, he stressed the need for measured, strategic reforms to align monetary policy with economic realities.
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[Image Caption: Former Central Bank Governor discusses monetary policy strategies in the post-war period.]
