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Iranian President Removed As Central Bank Board Chairman

Iranian President Mahmud Ahmadinejad
Iranian President Mahmud Ahmadinejad
The Iranian parliament has passed a law removing President Mahmud Ahmadinejad from the post of chairman of the General Assembly of Iran's Central Bank, RFE/RL's Radio Farda reports.

The legislation passed on November 14 also divests Ahmadinejad of the authority to appoint the Central Bank's governor and deputy governor.

The remaining members of the Central Bank's General Assembly are currently the minister of economic affairs and finance, the head of the State Management and Planning Organization, the minister of commerce, and one more minister to be selected by the Council of Ministers.

Under the new arrangement, the members will include seven economists, plus the chief prosecutor and the head of the Chamber of Commerce, Industries and Mines.

U.S.-based analyst Reza Fani Yazdi told RFE/RL's Radio Farda on November 15 that the law was a victory for the parliament in its ongoing power struggle with the government. That struggle has become more acrimonious in recent months.

"The fact that members of the bank's General Assembly, who were all representatives of the government, will be replaced by seven economists shows that the Central Bank's General Assembly has been taken away from the government," Fani Yazdi said.

The new law would limit the government's power within the Central Bank, which plays a very sensitive role in Iran, Fani Yazdi added.

Yazdi also noted that the parliament decision would make the country's monetary policy independent of the government's financial policies. The government would no longer be able to cover budget deficits by loans from the Central Bank, Fani Yazdi said.

IRNA quoted Mohammad Reza Bahonar, the legislator who proposed the bill, as saying one of the reasons for the changes in the Central Bank management is that some Western countries have tried to confiscate the bank's assets as government assets.

For that reason, "Iran's Central Bank should be independent from the government," Bahonar reasoned.