You see a page from the old site of Iran International that is no longer updated. Visit iranintl.com to view the new site.

Iran Forex, Stock Exchange Edge Upward With Biden

Maryam Sinaiee

The Iranian foreign-exchange (Forex) market opened with a hike in the value of the rial on Thursday [November 5] and the Tehran Stock Exchange (TSE) rose 2.06 percent, both in expectation of a Joe Biden victory in the United States presidential election and Washington returning to Iran’s 2015 nuclear agreement.

The Melli Exchange Company (MEX), which leads Forex rates in Iran, dropped its opening dollar sale rate by 20,000 rials to 268,500 rials and later dropped it further to 265,500. On Wednesday the MEX opened with a dollar selling price of 285,800 rials but increased to 287,800 later during the day.

All Wednesday the Forex market anxiously followed US election results. The dollar rose against the rial as President Donald Trump did better in many US states than had been expected and the chances thereby increased of him remaining in the White House along with his “maximum pressure” on Iran. The Democratic Party challenger Joe Biden has in contrast spoken of returning to the 2015 nuclear agreement, which Trump left in May 2018, and through which Iran had limited its atomic program in return for eased sanctions.

“Until midday [Tehran time], the market was almost convinced that Trump was going to win,” Tejarat News, a business and economy website, reported on Thursday.

According to Donya-ye Eghtesad newspaper, which also focuses on business and economy, despite the official closure of the Forex market at 4pm, the dollar began to fall in online trades on Wednesday evening as Biden closed in on Trump in Michigan.

“It appears that traders believe the economic pressures on Iran will decrease if Biden takes over the White House,” Donya-ye Eghtesad noted on Thursday. “This optimism has equaled his presence in the White House with a drop in the value of the dollar [against the rial] and gold coins… Many analysts, however, believe that the crisis in the Iranian economy is more a result of wrong domestic policies than the US pressure.”

The falling Iranian national currency on October 1 reached the milestone of 300,000 rials to the dollar, a ten-fold fall in the three years since Trump indicated that he would withdraw from the nuclear agreement and impose sanctions on Iran. Draconian third-party sanctions on Iran’s oil exports have deprived the government of its major foreign-currency revenue source. With a 50 percent budget deficit, the Central Bank of Iran has no choice but print money, further devaluing the currency and feeding inflation.

The TSE, likewise, closed on Wednesday afternoon 1,290,507 after rising 2.06 percent after continuous drops since October 11. Most shares being purchased belonged to banks and investment funds, with their shares rising as much as 5 percent.

Some analysts believe market reactions will be short term as Iran’s main economic problems are domestic rather than due to any international factors, even the outcome of the US elections. “It appears that the investment market will demonstrate an enthusiastic reaction for a week, whichever of the [US] candidates wins, and will then again develop on the basis of [real] stock [values],” Akbar Hamedi-Meykhosh, Chief Executive of the investment company Boursiran was quoted by Bourse News as saying on Wednesday.

Iran in Brief
City officials in Iran's capital Tehran are planning to put locks on large waste containers in the streets to prevent garbage pickers from accessing waste.More
The Biden Administration has confirmed to the US Congress that sanction imposed by its predecessor on Iran have drastically reduced Iran's trade with the world.More
The UK government said on Sept 20 that Britain would "not rest" until all its dual nationals being held in Iran were returned home.More
President Ebrahim Raisi’s vice president in women’s affairs has refused to support an age limit in child marriage, a controversial issue in Iran.More
In first news about detained Iranian dissident rap singer Toomaj, Iran International has learned that was arrested by the intelligence ministry.More