Wednesday, June 04, 2008

Rumor has it

Several Iranian news outlets reported yesterday that it is a strong possibility that Mr. Mazaheri, head of Central Bank of Iran, is going to be replaced by Vice President Parviz Davoudi. Should this change take place it will be the first time that a senior member of government, second only to President, trades his office for the seal of Central Bank. It would also signal Mr. Ahmadinejad’s persistence in pursuing his economic policies and projects, such as merging major public banks, despite all the criticism and objections from all parts of political spectrum in Iran.

Mr. Mazaheri has made it clear that he would not lower interest rates and he would not agree to government’s plan to merge banks. Despite the pressure from the government it seems he has been successful so far to protect banking system in Iran. Many observers believe that the first of the new Majlis is to save the economy. It is most likely that the new Majlis would not remain silent in this matter. Replacing the head of Central Bank would not be as easy as some might have thought.

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