A Review of Exchange Rate Regimes Categories, Exchange Rate Regimes in OIC Member Countries & Suggestions for Iran's Exchange Regime

Present study categorizes the experienced exchange rate regimes in various countries of the world، considers their main characteristics، advantages، disadvantages and finally discusses about a total consideration of each exchange regimes selection. This paper mentions those countries special characteristics، policymakers’ preferences، institute، policymaker’s credibility the choice of exchange regimes. Therefore، neither a single exchange regime is appropriate for all countries nor using one-exchange regimes is useful for a country during some years. Next part of paper presents comparative study of exchange regimes in OIC member countries and shows that most member countries، have pegged their money with a stable rate to other country’s money or basket of other exchanges. Following session considers transitions revolution of Iran’s exchange regime، its challenges and discuss about most important Iran’s economic challenges via high rate of inflation، consistent growing pressure on formal exchange rates increase، not regarding government and monetary position to arbitrage rule، considering exchange rate as inflation’s control tool، maintaining economic stability and fear of flotation of monetary position. These factors caused inevitable shocking changes in formal exchange rate in 10 years period in Iran. Finally concluded that protection of managed floating exchange rate that announced as formal exchange rate regime in Iran، needs some requirements، obligations as inflation targeting، more independent of monetary position and without targeting of single-digit inflation، its own requirements will be impossible.