TEHRAN- The governor of Central Bank of Iran (CBI) said the bank is controlling the forex market and plans to strengthen this control through a new monetary policy, IRIB reported.

Making the remarks on the sidelines of a meeting of the Economic Committee of Majlis on Sunday, Abdolnasser Hemmati mentioned launching open market operation (OMO) system as the new policy of CBI in the monetary market and said this system will control inflation in a target-oriented way.

OMO is one of the significant monetary instruments all over the world and this system has been operating in the global markets for many years, the official noted, adding, “We will operate it in Iran gradually.

“Of course operating this system precisely and completely takes some time, but the important point is that it has been launched and there is some determination to operate it”, Hemmati underscored.

CBI officially launched an open market operation system on January 16, as part of its monetary policy to curb inflation, control interest rates in the interbank market and manage liquidity.

According to CBI governor, the main purpose of the open market operations is to control liquidity and inflation in the market.

“Typically, central banks conduct open market operations or buy and sell securities to achieve their macroeconomic goals, namely inflation control and economic growth stability”, Hemmati wrote on his social media on Friday.

The main task of this system is the purchase and sales of government bonds, particularly short-term securities such as treasury documents with banks and credit institutions, the official explained. 

In general, OMO is a financial instrument through which central banks buy and sell securities in the open market to expand or reduce the money supply. 

MA/MA