Monetary discipline enforced by the government in the wake of recent volatilities in the market has brought tranquility and stability into the market, according to President Hassan Rouhani’s Chief of Staff Mohammad Reza Nahavandian.
In a note he wrote and published on the Eghtesad News website, Nahavandian said the Iranian economy is being badly influenced by political and social developments in the region and beyond.
The extension of nuclear talks, which was agreed by the parties involved in the negotiations over Iran’s nuclear energy program, took its toll on the Iranian economy to the extent that it made it susceptible to what he called “serious and worrying fluctuations”.
Iran and the P5+1 (the five permanent members of the UN Security Council plus Germany) agreed to extend the ongoing nuclear talks until June 30, 2015, after they failed to meet a self-imposed deadline last month to reach a final settlement to a long-running dispute over Tehran’s nuclear program.
“The outcome of the talks destabilized the market after one and half years of tranquility and stability,” he said, noting that the government was able to control the market through its “balanced management”.
The forex market in Tehran was faced with a new challenge in recent weeks, as the national currency, the rial, has been falling against all major foreign currencies. The depreciation of the rial was in part a response to what some Iranian traders and economists interpreted as the predictable outcome of the extension of talks as well as further plunge in oil prices at the international markets.
Crude has recently plunged to as low as $65 per barrel, with oil market experts predicting that the downward trend will persist for the next few months.
