Every instruction cycle in a CPU has distinct phases — fetch, decode and execute — and the processor needs a dedicated place to hold the current instruction while the control unit works on it.

The Instruction Register (IR) is that place: once an instruction is fetched from memory, it is loaded into the IR so that the control unit can decode its opcode and drive its execution.

The instruction stays in the IR throughout decoding and execution, which is why it is the register that "holds the instruction currently being decoded and executed".

The Memory Address Register (MAR) only holds the memory address that is being read from or written to, not the instruction word itself.

The Program Counter (PC) holds the address of the next instruction to be fetched, so it points ahead rather than holding the instruction being executed now.

The Accumulator (AC) stores intermediate data — the operands and results of arithmetic and logic operations — not the instruction code.

Since the register that retains the instruction during decode and execute is the IR, the correct answer is the Instruction Register (IR).