Journal of Legal Research

Journal of Legal Research

Institutional Independence and Legislative/Executive Intervention in Monetary Policy-Making: A Study of Iran’s Monetary and Banking Framework

Document Type : Original Article

Authors
Parisa Ghorbani Zirdehi 1
Alireza Masoudi 2
Mahmood Bagheri 3
Hossein Ghorbanian 4
1 PhD Student in Private Law, North Tehran Branch, Islamic Azad University, Tehran, Iran.
2 Assistant Professor, Department of Private Law, North Tehran Branch, Islamic Azad University, Tehran, Iran.
3 Associate Professor, Department of Private Law, Faculty of Law and Political Science, University of Tehran, Tehran, Iran; Invited Professor, North Tehran Branch, Islamic Azad University, Tehran, Iran.
4 Assistant Professor, Department of Private Law, Shahrood Branch, Islamic Azad University, Shahrood, Iran; Invited Professor, North Tehran Branch, Islamic Azad University, Tehran, Iran.
10.48300/jlr.2023.405218.2382
Abstract
Notwithstanding the explicit provisions of the Monetary and Banking Act of Iran, pursuant to which the Central Bank and its principal decision-making body, namely the Money and Credit Council, are recognized as the primary monetary policymakers, and despite the fact that various provisions of the said law address monetary policymaking in a manner suggesting that the Central Bank functions as the sole policymaking authority acting independently from other institutions, practical experience demonstrates that both the legislative and executive branches intervene in the formulation and implementation of monetary policy. This article, while examining the institutional position and authority of the various monetary policymaking bodies, analyzes certain instances of duality, inconsistency, and conflict arising from the legislative and executive branches’ regulatory interventions in the realm of monetary policymaking. The study demonstrates the consequences of intervention by non-specialized governmental institutions in monetary policy and explains how such intervention constrains the autonomy and effective functioning of the specialized monetary authority, which, by its very nature, ought to operate independently. Furthermore, the article explores the potentially adverse economic consequences arising from the erosion of central bank independence and institutional coherence in monetary governance.
Keywords
Monetary and Banking Act
Monetary Policy
Policymaking Institution
Central Bank Independence
Money
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Journal of Legal Research
Volume 25, Issue 65
Spring 2026
Pages 219-241