A Policy Dialogue Workshop on “Islamic Monetary Policy” was held in Tehran, Islamic Republic of Iran on 8-9 January 2011. The workshop was jointly organized by Islamic Research and Training Institute (IRTI), which is a member of the Islamic Development Bank (IDB) Group, and the Monetary and Banking Academy (MBRA) of the Central Bank of Islamic Republic of Iran. The workshop brought together officials from the Central Banks of some OIC member countries, academicians, researchers, and other experts from the OIC member countries. SESRIC was represented at the workshop by Mr. Murat Atlamaz, Senior Researcher at the Centre. Islamic finance and its implications for the monetary policies of some OIC member countries were the main theme of the workshop.

The workshop started with welcoming remarks made by Dr. Hossein Ghazavi, a Deputy Governor of the Central Bank of Iran, and Dr. Abd elrahman Elzahi Saaid Ali, the representative of IRTI. During the panels, country experiences of Iran, Pakistan, and Sudan were presented by the representatives of the Central Banks of these countries. Dr. Ahmad R. Jalali-Naini, Associate Professor at MBRA, deliberated on different monetary policy instruments and provided a comparison of interest based versus non-interest based instruments. Dr. Jalali-Naini gave a thorough review of the economic literature on this topic. ‘The application of non-interest based monetary policy instruments in Iran’ was presented by Dr. Akbar Komijani, Professor of Economics at the University of Tehran. In his presentation, Dr. Komijani evaluated the performance of the monetary policy of Iran during 1972-2009.

Dr. Ali Arshadiy, the representative of the State Bank of Pakistan, and Dr. Nagmeldin H. Ibrahim, Deputy Director of the Policies Department at the Central Bank of Sudan, delivered speeches on the application of non-interest based monetary policy instruments in Pakistan and Sudan, respectively. Dr. Arshadiy emphasized on the importance of independence and transparency of central banks and deliberated on the specific mechanisms used by the State Bank of Pakistan to retain independence and transparency. Dr. Musa Jega Ibrahim, Economist at the Islamic Research and Policy Department of IDB, made a presentation on the role of IDB in promoting Islamic economic policy to achieve sustainable development in Muslim countries. In his presentation, Dr. Ibrahim emphasized the importance of setting international standards for Islamic financing.

During the panels, the participants conducted an in-depth discussion during the workshop on various related issues, particularly on the advantages and the challenges of the non-interest based monetary policy. The workshop ended with a general panel discussion of the speakers where some concluding remarks and recommendations have been made on the subject.