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Why the Iranian government must modernize its cash management system

The Rouhani administration ought to modernize its cash management with a Treasury Single Account to combat corrupt practices, eliminate a lack of discipline in public finance and ensure adequate fund flow to critical sectors of the economy.
A storekeeper places money in the drawer of the cash register at his shop in Tehran May 4, 2008. With Western banks cutting ties with the Islamic Republic, it is becoming more and more difficult to transfer funds to the country of 70 million people. Tehran's increasing financial isolation is forcing some to bring in money by hand in thick wads of $100 bills on the plane from Dubai, the Gulf's financial centre, or elsewhere. REUTERS/Morteza Nikoubazl (IRAN) - GM1E4580O5Y01

Managing and controlling the government’s cash resources has long been a major challenge to the implementation of budget laws and oversight of the government’s receipts and payments from and to a diverse number of state and nonstate agencies and entities in Iran. Fragmented government banking arrangements, coupled with various loopholes in the relevant laws, have prevented the Ministry of Economic Affairs and Finance of Iran’s Treasury Unit from improving budget control and the quality of fiscal information.

The International Monetary Fund has advised a Treasury Single Account (TSA) as a prerequisite for modern cash management. The TSA is a process and tool that unifies all government accounts for the effective management of its finances, bank and cash position. It is an objective that the Treasury Unit has sought to fulfill for years, without much success.

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