president, the Majlis voted Sunday to take up legislation to remove the president from the board of directors of the Central Bank.
Majlis deputies said the purpose of the change is to make the Central Bank independent of the government. Around the world, central banks of most countries, including the United States and Canada, operate independently of their governments.
President Ahmadi-nejad has twice fired the governor of the Central Bank and named replacements. The legislation before the Majlis also revokes the president’s authority to fire governors and name replacements. News reports did not say who will gain that authority.
The move was clearly an effort to cut down the power of the president, even though a goal of making the bank more independent is a logical one and probably played a role in the vote to take up the bill.
The bill was approved on what is called the first reading. That means the Majlis thinks enough of the bill that it agrees to consider it. The bill now goes to the Budget Committee, which will review it, possibly amend it, and then bring it back to the full chamber for a final vote.
The current governor, Mahmud Bahmani, did not say whether he supported the Majlis action. He spoke only elliptically, saying, “If one day I reach the conclusion that the Central Bank has lost its independence, that will be the day I resign from this job.”
Previously the bank’s board was comprised of the president, economy minister, commerce minister, vice president for strategic planning and another minister chosen by the cabinet.
Under the draft legislation, the new and expanded board will be comprised of the economy minister, the vice president for strategic planning, the national prosecutor general, the chairman of the Chamber of Commerce and seven economists with at least 15 years of experience each. The initial reports on the bill did not say who would appoint the seven economists, except to say the president would not have appointive authority. No one explained why the prosecutor general was included on the bank’s board.
The legislation to change the governance of the Central Bank was introduced by Mohammad-Reza Bahonar, a senior deputy who has often been critical of Ahmadi-nejad. The vote totals were not announced.