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Another big decline in Iran’s stock market on Sunday has highlighted the precarious state of the economy amid uncertainty over the future of nuclear talks.
The Tehran stock market index dropped by about 30,000 points, bringing it close to 1.2 million points, down from more than 1.4 million in early August when President Ebrahim Raisi took office promising to boost capital markets.
According to reports, economic uncertainty resulting from a lack of progress in nuclear talks with the West is the main reason for the continuous decline of the stock market.
An expert in capital markets told that there is a lack of investment capital and market lethargy.
The government which faces a huge budget deficit issued more bonds in August, which drained the capital markets.
One expert said that the government and the central bank are using the stock market as a source of financing.
At the same time, First Vice President Mohsen Rezaei, who is one of Raisi’s top officials in charge of the economy told parliament on Sunday that the government will never print more money without proper backing, which would mean hard currency reserves. Iran has been spending its reserves to make up for lost oil exports, banned by US sanctions.
He even invited expat Iranian to bring their “intellectual and financial capital back to Iran” and invest in the future. This seems to be another optimistic expectation given the fact that up to $100 billion is said to have left the country in the past decade.
President Raisi’s first three months in office is coming to a close next week with no visible improvement in the economy.
Critics already began demanding action instead of words in mid-October, while the president appeared to be issuing daily orders to officials to solve deep-rooted problems that cannot be addressed without the lifting of US sanctions.
