New monetary literatures widely concentrates on the importance of institutional arrangements in the effectiveness of monetary policy. The debate regarding the optimal institutional design of Central Banks, independence and conservatism are usually considered to be the most important ingredients for a stable and successful monetary policy. Therefore, the purpose of this study is to deal with the institutional arrangements of monetary policy especially Central Bank Independence (CBI) and Central Bank Conservatism (CBC). Indices used by Grilli et al. (1991), Cukierman (1992), Mathew (2006) and Dumiter (2009) were applied to calculate the CBI during 1961-2016, and CBC in Iran using a dynamic optimal solution under commitment in Barro-Gordon and New-Keynesian forward looking Philips Curve models. Results show that the relative concern on inflation is smaller than that on output gap for the Central Bank of Iran. Also results regarding the calculations of CBI based on different indices reveals the fact of insufficient independence of Central Bank in Iran.

The literature on international economics and finance shows that the exchange rate regime is an important factor in macroeconomic performance through its effects on the balance of payments and inflation. In this paper, we analyze the exchange rate regime in Iran and estimate the degree of the Central Bank’s intervention in the exchange rate market. The paper follows three steps as follows: First, we calculate an index for the exchange rate intervention of the Central Bank. Second, we use the Markov Switching Model to identify the periods of interventions, and finally, we estimate the determinants of the interventions using a probit model. Our quarterly data covers the period 1378: 01-1387: 04 (1999-2008). The estimation results show that Central Bank intervention has increased in the periods 1378: 01-1380: 08, 1382: 01-1383: 04 and 1386: 01-1387: 12. Furthermore, the probit model estimation results indicate that inflation, domestic credit and the foreign exchange liabilities as a ratio of foreign exchange reserves are significant determinants of increasing intervention in the Iranian exchange rates market.

This study seeks to examine the effect of Central Bank intervention pressure on the country’s business cycles during recession and expansion regimes. For this purpose, using a rotational model and the Markov-switching regime change approach, the effects of the study variables are analyzed over the period from 1994 to 2022. The estimation results of the Markov model for recession and expansion periods indicate that the Central Bank intervention index, deviations of the exchange rate from its long-term path, the effect of sanctions, and the inflation rate during both recession and expansion periods have a positive impact on the output gap. Moreover, the variable of the growth rate of foreign exchange revenues from oil sales during expansion periods leads to a reduction in the output gap. These effects over the years should be analyzed in light of the Central Bank’s intervention in the national economy. Specifically, the greater the growth in the exchange rate, the more policymakers have sought to react in order to control the exchange rate growth and prevent further increases. However, the response to deviations in the exchange rate diminishes. Therefore, under conditions where the exchange rate experiences higher growth, policymakers tend to focus more on controlling the exchange rate and pay less attention to its deviations.

The purpose of this paper is to estimate the response of the Central Bank's intervention policy based on Wimmark's (5991) theory. For this purpose, first, the Central Bank's intervention index was calculated with the currency market pressure approach and then the response function of the intervention policy with the threshold approach (STAR) based on seasonal data for the years 5731-5793 was estimated. The results of the estimation of the linear part of the model show that the variable of exchange rate deviations from the long-term path has a negative effect on the Central Bank's intervention index. Meanwhile, the results of the non-linear estimation of the model indicate the positive effect of long-term exchange rate deviations and the growth rate of foreign exchange earnings from oil sales on the intervention of the Central Bank in Iran. This indicates that with the increase in government foreign exchange earnings, the growth of the Central Bank's foreign exchange reserves will increase. In other words, the government is offering more foreign currency to the Central Bank in exchange for the Rials, and the Central Bank is forced to add these amounts to its foreign exchange reserves. In fact, in Iran, due to high inflation, governments have always tried to regulate the exchange rate at a low level in order to prevent the rise in prices. The result of this type of intervention has been the inflexibility of the nominal exchange rate in response to changes and economic developments, which could be a factor in reducing the real exchange rate in recent decades in Iran.

This paper critically reviews the Central Bank of the Republic of China (Taiwan) Act and finds that the level of legal independence of the Central Bank is relatively low compared to the rest of the world. However, Taiwan has been able to combine low inflation with a legally dependent Central Bank. In this paper an attempt is made to provide the possible explanations to this low inflation/low independence puzzle in Taiwan and argue that Taiwan should still follow the trend of creating a more independent Central Bank.

The issue of exchange rate fluctuations, management and Central Bank intervention in this market is one of the most important issues in the field of economic literature as well as in economic policy issues. In order to maintain balance in the markets, especially the foreign exchange market, and to protect it from the attack of traders, policymakers always try to manage exchange rate changes in a favorable range by applying appropriate policy tools. Under a managed floating exchange rate system, surplus supply or demand for foreign exchange is usually adjusted by a combination of exchange rate fluctuations and foreign reserves. Simultaneous changes in exchange rates and foreign reserves are interpreted in the economic literature as Exchange Market Pressure. Due to the strong dependence of government economic activities and even the private sector on foreign exchange resources resulting from oil exports, due to the rapid transfer of foreign exchange shocks to the country's economic variables, the study of this issue is inevitable. So this article tries to embedding the monetary channel of the Exchange Market Pressure index in the policy function of the Central Bank based on the Dynamic Stochastic General Equilibrium model, the policymaker's behavior in the face of various foreign exchange shocks should be analyzed. Accordingly, the exchange rate fluctuation has been compared in two policy functions of a Dynamic Stochastic General Equilibrium model for the Iranian economy. In the first model, monetary policy is adjusted in response to the foreign Exchange Market Pressure index, and in the second model sensitive to the real exchange rate. The results show that in the first model, in exchange rate shoks, inflation, production, consumption and investment have less fluctuations than the second model, and the economy reaches equilibrium in less time. Therefore, the effectiveness of the Central Bank's monetary policy through sensitivity to foreign exchange market pressure will be greater than sensitivity to the real exchange rate.

One of the essentials for the realization of Islamic Banking is founding the Central Bank based on Islamic values and principles. Using an analytical approach, and given the limited studies in the field of Central Banking in Islamic economics literature, this paper provides a favorable model of Central Banking in the Islamic Banking system. According to the research hypothesis, the Central Bank in the Islamic economy has a different nature, structure, goals, tools and policies than the Central Bank in the conventional economy. Based on the research results, the proposed model of Islamic Central Banking presents a new structure of Islamic monetary and Banking system. In this modern structure, Banks do not have the power to create money (full reserves) and money creation is done only by the Islamic Central Bank. In this model, the institution of the Bank returns to the true position of financial intermediation.