The Central Bank of Iran (CBI) governor says the bank is planning to issue deposit bonds, a new type of security approved by the lender’s Shariah advisory arm, as it seeks to contain inflation by reducing the amount of money supply in the country.

Akbar Komeijani said on Tuesday that the CBI has been making preparations to issue the deposit bonds, or what will be locally known as Oragh Wadiaa.

“We hope we can use this instrument this year (to March) to control money base and the inflation rate,” said Koemijani while addressing Iran’s Islamic Banking Conference, a annual gathering of senior government officials and major economists which is being held virtually this year due to the coronavirus restrictions.

Komeijani said Wadiaa bonds will replace corporate bonds issued by the CBI over the past two decades.

Wadiaa bonds were approved in 2019 by members of the CBI’s Jurisprudence Council, a body which screens monetary policies and banking mechanisms to decide if they comply with the Islamic principles.

 

Source: Press