Three weeks after nuclear talks in Vienna failed to put an end to the 12-year nuclear standoff between Iran and the West, forex and the stock and gold markets in Tehran are still nosediving, with Iran’s monetary officials struggling to control the negative sentiment.<\/p>\n
The rial has lost over 3,200 against the dollar.\u00a0 TEDPIX, the Tehran Stock Exchange\u2019s main index has also drpped.. So far, the Tehran Stock Exchange has plunged over the last three\u00a0weeks by 1.5% to 3%.<\/p>\n
Rouhani hailed the extension of talks as a victory.\u00a0 Administration officials\u00a0later echoed his remarks, as the rial was continuing to depreciate against all major foreign currencies. Surprisingly, this time\u00a0the moderates obtained a staunch conservative supporter. Supreme Leader Ayatollah Al Khamenei said in a speech a couple of days after Iran and the P5+1 agreed to extend talks that he was “not in opposition to the extension of the talks.\u201d His backing comes as conservatives, of course not the ayatollah himself, have\u00a0been criticizing the administration in the last year for taking a “soft” stance in talks with the West, namely the United States.<\/p>\n
However, Ayatollah Khamenei said that the government does have an economic response to the crippling sanctions. The government does not want to announce publicly that the continuation of sanctions has negatively affected the market sentiment.<\/p>\n
On the other hand, a new group of economists, mainly loyal to the moderate government, has insistently backed the idea through news media that it was the OPEC\u2019s decision that pushed markets into the red.<\/p>\n
Coincidentally, at the same time as the nuclear talks, OPEC was meeting in Vienna where the member countries decided to maintain their output, despite Iran’s opposition.<\/p>\n
A number of economists in Tehran now argue that with OPEC refusing to cut the production of 30 million barrels a day, the oil price will probably plunge even further in the coming months.<\/p>\n
Among those blaming the recent oil price decline for the free\u00a0fall of Iranian markets is Mohammed Tabban,\u00a0 a Tehran-based economist, who believes the OPEC’s decision has made the public think that oil revenues will plunge next year.<\/p>\n
People fear that government revenue from oil exports will drop further and therefore foreign currencies might be in short supply in the Iranian market.<\/p>\n
It appears that professional dealers and traders are more concerned about sanctions and the future of the nuclear talks than the OPEC\u2019s decision, whose immediate impact on markets is hardly believed to be a major issue.<\/p>\n
Given the fact that ordinary people are so sensitive about the value of the dollar, monetary officials have come with ideas to help avoid rapid depreciation of the rial against the dollar in the future.\u00a0 Three researchers with the Monetary and Banking Research Institute wrote in that the Central Bank of Iran needs “to control the rial’s flux, and not its rate.”<\/p>\n
Three weeks after nuclear talks in Vienna failed to put an end to the 12-year nuclear standoff between Iran and the West, forex and the stock and gold markets in Tehran are still nosediving, with Iran’s monetary officials struggling to … Continue reading ![\"Nuclear](\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2014\/12\/Nuclear-Talks-or-Oil-Prices-300x236.jpg\")
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