MRC Floats New Ideas to Help Curb Inflation

EghtesadOnline: Academics and economic experts have cautioned that the successful implementation of the proposed measures demands, among other things, a clear and comprehensive approach by and robust coordination among stakeholders.

News ID: ۷۵۲۵۴۵

17 May 2023

In a report the Majlis Research Center (MRC) has proposed ways on "Short-Term and Long-Term Solutions to Tame Inflation." The short-term list focuses on minimizing exchange rate fluctuations improving monetary policy governance, and strengthening the role of the central bank.

According to the report, long-term measures should help control the quantity and quality of liquidity, reform the banking sector, make a final decision on troubled banks, improve budgetary structure, avoid imposing state pricing strategies to fight inflation, redefine policies guiding pension funds and reduce rampant liquidity, IBENA reported.

One key proposal is to reduce importers' cautionary demand cycles by introducing new derivative currency instruments. This would demand restructuring the foreign exchange market in its entirety, consolidate official supply and demand at the exchange center without price interference and subsequently establish an efficient reference exchange rate.