Central Bank of the Islamic Republic of Iran

Central Bank of the Islamic Republic of Iran

The Central Bank of the Islamic Republic of Iran ( _fa. بانک مرکزی جمهوری اسلامی ايران, "Bank Markazi Jomhouri Islami Iran") is the central bank of Iran.


The Ilkhanate were one of the rulers of Iran that tried to introduce paper currency in Iran in the late 13th century, without success. [Patrick Clawson. "Eternal Iran". Palgrave. 2005. Coauthored with Michael Rubin. ISBN 1-4039-6276-6 p.168]

In modern banking, the British first opened the Imperial Bank of Persia in 1889, with offices in all major cities of Persia and India. To compete with the British bank, Imperial Russia also opened the Russian Loan and Development Bank. [Patrick Clawson. "Eternal Iran". Palgrave. 2005. Coauthored with Michael Rubin. ISBN 1-4039-6276-6 p.41]

The first state owned Iranian bank, Bank Melli Iran was established in 1927 by the government of Iran. [Patrick Clawson. "Eternal Iran". Palgrave. 2005. Coauthored with Michael Rubin. ISBN 1-4039-6276-6 p.55] The bank's primary objective was to facilitate government's financial transactions and to print and distribute the Iranian currency (rial and toman). For more than 33 years, Bank Melli Iran was acting as the central bank of Iran with the responsibility to maintain the value of Iranian Rial.

In August 1960, the Iranian government established the Central Bank of Iran (CBI) and separated all central banking responsibilities from Bank Melli Iran and assigned it to the newly formed central bank [web cite|url=http://www.cbi.ir/section/AboutTheBank.aspx|title=About the Central Bank of Iran|publisher=The Central Bank of the Islamic Republic of Iran] .

The Central Bank of Iran was renamed to the Central Bank of the Islamic Republic of Iran immediately after the Islamic revolution and the overthrow of the Shah of Iran. Scope and responsibilities of the Central Bank of the Islamic Republic of Iran (CBI) have been defined in the Monetary and Banking Law of Irancite web|url=http://www.cbi.ir/simplelist/1457.aspx|title=Monetary and Banking Law of Iran|publisher=Central Bank of the Islamic Republic of Iran]

CBI maintains a museum of historic and ancient jewelry owned and used by the ex-kings of Persia. This museum houses the Imperial Crown Jewels and is one of the most appealing tourist attractions in Iran.

Governors of the Central Bank of Iran [ [http://www.cbi.ir/page/1570.aspx Governors ] ]


The objectives of the Central Bank of the Islamic Republic of Iran as per its charter and according to section 10 of the Monetary and Banking Law of Iran are as follows:

* Maintaining the value of national currency
* Maintaining the equilibrium in the balance of payments
* Facilitating trade-related financial transactions
* Improving the growth potential of the country

Islamic Banking

In a country where the government claims to follow the strict Islamic principles, running a traditional banking network would be against the fundamental teachings of Qur’an. Therefore, immediately after the Islamic Revolution, the Central Bank was mandated to establish an Islamic banking law. In 1983 the Islamic Banking law of Iran was passed by the Islamic Majlis of Iran [cite web|url=http://www.cbi.ir/simplelist/1457.aspx|title=Iran's interest-free banking law|publisher=Central Bank of Iran] . According to this law, Iranian banks can only engage in interest-free Islamic transactions (interest is considered as usury or riba and is forbidden by Islam and the holy book of Qur’an). These are commercial transactions that involve exchange of goods and services in return for a share of the assumed "profit". All such transactions are performed through Islamic contracts, such as "Mozarebe", "Foroush Aghsati", "Joale", "Salaf", and "Gharzol-hassane". Details of these contracts and related practices are outlined in the Iranian Interest-Free banking law and its guidelines. This law describes and authorizes an Iranian Shiite version of Islamic commercial laws.

Critics believe that this law has simply created the context for legitimising usury or riba. In reality all banks are charging their borrowers a fixed pre-set amount at a rate of interest that is approved by the Central Bank at least once a year. No goods or services are exchanged as part of these contracts and banks rarely assume any commercial risk. High value collateral items such as real estate, commercial paper, bank guarantees and machinery eliminate any risk of loss. In case of defaults or bankruptcies, the principle amount, the expected interest and the late fees are collected through possession and or sale of secured collaterals.

Key Statistics

*Reserves of foreign exchange & gold: US$40.06 billion (2005 est). :*Composition: In 2007, 10% of the Reserves were held in Gold, 20% in US dollars (down from 40% in 2006), the rest mostly in Euro and other major currencies (ie, Yen, British Pound and the Swiss Franc). :*Usage: Part of the reserves are held in the $12 billion (2006) Oil Stabilization Fund, designed for capital investment or for budget support if oil prices - Iran's main foreign exchange earner - fall perilously low. [ [http://tehrantimes.com/Description.asp?Da=6/25/2007&Cat=9&Num=017 We welcome the euro, says Tehran] ]

* Iran's deposits in foreign banks stand at $35 billion while its obligations amount to $25 billion (2007). [ [http://www.presstv.com/Detail.aspx?id=59305&sectionid=351020102 Press TV - Iran's foreign deposits stand at $35bn ] ]

*Exchange rates: "rials per US dollar" - 9,326 (2007), 9,246 (2006), 8,964 (2005), 8,885 (2004), 8,193.89 (2003): "note: Iran has been using a managed floating exchange rate regime since unifying multiple exchange rates in March 2002.": "Pre-unification, rials per US dollar"::: "Market": 8,200 (2002), 8,050 (2001), 8,350 (2000) [ [http://www.farsinet.com/toman/exchange.html Iranian Currency Exchange Rate - Money Exchange in US, Europe & Canada - Iranian Currency Exchange Rate History, Iran Curency System, Iranian Currency History ] ] :: "Official": 6,906.96 (2002), 1,753.56 (2001), 1,764.43 (2000) [CIA factbook]

*The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $71.7 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $153.6 billion. According to the CBI, the country's liquidity amounted to some $174 billion by April 2008. [ [http://www.payvand.com/news/08/jul/1036.html Iran's inflation rate 21%, liquidity $174b, Central Bank says ] ]

*Commercial banks' lending rate: [ [http://www.economist.com/Countries/Iran/profile.cfm?folder=Profile%2DEconomic%20Data Economist.com | Country Briefings: Iran ] ] 12.0% (2007), 11.5% (2008), 11.0% (2009)

*According to Bank Markazi, rate of inflation as of April 2008 is 18.4% [cite web|url=http://www.bbc.co.uk/persian/iran/story/2008/04/080430_si-khamenei-economy.shtml|title=Iranian leader defends the president of the Islamic Republic of Iran|publisher=BBC] .

Inflation and Monetary Policy

Double digit inflation rates have been a fact of life in Iran for the past 20 years. Between 2002 and 2006, rate of inflation has been fluctuating between 12 and 16% [cite web|url=http://www.indexmundi.com/iran/inflation_rate_(consumer_prices).html|title=Iran Inflation Rate|publisher=index Mondi] .

Monetary policy in Iran has not been successful in meeting the inflation and monetary targetsset in the Iranian Five-Year Development Plans, owing mainly to the monetary impact of governmentspending out of oil revenue. Although the attainment of the inflation targets has improvedsomewhat recently, the objective of a gradual disinflation to single-digit levels has not beenachieved. Moreover, the implicit intermediate target of monetary policy, money growth, hasbeen systematically missed [cite web|url=http://www.imf.org/external/pubs/ft/wp/2007/wp07119.pdf|title=Money and Inflation in the Islamic Republic of Iran|publisher=IMF] .

The Central Bank is an extension of the Iranian government and as such it does not operate independently. Interest rate is usually set based on political priorities and not monetary targets. There is little alignment between fiscal and monetary policy.

Membership in International Organizations

*Iran is member of the Islamic Development Bank.

*As of August 2006, the World Bank has financed 48 development projects in the country for a total original commitment of US$3,413 million. [ [http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/MENAEXT/IRANEXTN/0,,menuPK:312964~pagePK:141132~piPK:141121~theSitePK:312943,00.html World bank report on Iran] ]

*Iran joined the International Monetary Fund (IMF) on December 29, 1945 [web cite|url=http://www.imf.org/external/np/fin/tad/exfin2.aspx?memberKey1=450&date1key=2007-10-10|title=Iran's Financial Position at IMF|publisher=IMF] . CBI governors attend IMF's board discussions on Iran on behalf of the government. These meetings are usually held once a year in Washington D.C. [web cite|url=http://www.imf.org/external/country/IRN/index.htm|title=Iran and IMF|International Monetary Fund] .

*The Central Bank of Iran has an observer status at the annual meetings of the Bank for International Settlements (BIS) in Basel, Switzerland.

ignificant Buildings

* Mirdamad Building - 144 Mirdamad Boulevard, Tehran, Iran [cite web|url=http://www.cbi.ir/page/Contact_en.aspx|title=Central Bank of Iran|publisher=Central Bank of Islamic Republic of Iran]
* Ferdowsi Building - Ferdowsi Ave, Tehran, Iran
* Jewelry Museum - Ferdowsi Ave, Tehran, Iran [cite web|url=http://www.allmuseums.com/javaherat_museums.html|title=Jewelry Museum|publisher=All Iranian Museums]


* [http://www.cbi.ir/default_en.aspx Official website]
* Swift Address: BMJIIRTH
* Postal address: 144 Mirdamad Boulevard, Tehran, Iran


ee also

*List of banks in Iran
*Iranian rial (Iran's currency)
*Tehran Stock Exchange
*Shetab Banking System
*Labour and tax laws in Iran
*Economy of Iran
*Privatization in Iran
*Iranian oil bourse
*Ministry of Petroleum of Iran
*Imperial Bank of Persia
*Islamic banking
*History of banking
*List of central banks

Further reading

* [http://iran-daily.com/1386/2860/html/focus.htm Islamic Banking — Iran Daily]
* [http://www.islamicbankinglaw.com Islamic Banking Law]

External links

*fa icon en icon [http://www.cbi.ir/default_en.aspx Central Bank of the Islamic Republic of Iran official site] (including statistics about Iran's economy)

Wikimedia Foundation. 2010.

Игры ⚽ Нужно решить контрольную?

Look at other dictionaries:

  • Central Bank of the Dominican Republic — The Central Bank of the Dominican Republic (Spanish: Banco Central de la República Dominicana, BCRD) was established by the Monetary and Banking Law of 1947 as the central bank of the Dominican Republic, responsible for regulating the country s… …   Wikipedia

  • Central Bank of the Democratic People's Republic of Korea — 조선민주주의인민공화국중앙은행 Joseon Minjujueui Inmin Gonghwaguk Jungang Eunhaeng Headquarters Pyongyang Central bank of Democratic People s Republic of Korea Currency North Korean won ISO 4217 Code …   Wikipedia

  • National Bank of the Kyrgyz Republic — The National Bank of the Kyrgyz Republic (Kyrgyz: Кыргыз Республикасынын Улуттук Банкы) is the central bank of Kyrgyzstan. See also Economy of Kyrgyzstan Kyrgyz som External links (Russian) (Kyrgyz) (English) National Bank of …   Wikipedia

  • History of the Islamic Republic of Iran — One of the most dramatic changes in government in Iran s history was seen with the 1979 Iranian Revolution where Shah (king) Mohammad Reza Pahlavi was overthrown and replaced by Ayatollah Ruhollah Khomeini. Autocratic monarchy was replaced by an… …   Wikipedia

  • Central Bank of Iraq — البنك المركزي العراقي The Central Bank of Iraq, guarded by U.S. troops in …   Wikipedia

  • Central Bank of Montenegro — Centralna Banka Crne Gore …   Wikipedia

  • Central Bank of Uzbekistan — The Central Bank of Uzbekistan, officially the Central Bank of the Republic of Uzbekistan (Uzbek: O zbekiston Respublikasi Markaziy banki / Ўзбекистон Республикаси Марказий Банки), is the country s national bank. Contents 1 Structure of the… …   Wikipedia

  • Central Bank of Nigeria — Central Bank of Nigeria …   Wikipedia

  • Central Bank of Cyprus — Kεντρική Τράπεζα Κύπρου (Greek) Kıbrıs Merkez Bankası (Turkish) …   Wikipedia

  • Central Bank of Somalia — Bankiga ee Dhexe ee Soomaaliya البنك المركزي في الصومال Headquarters …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”