GBPIRR LONG POUND GETTING STRONGER vs Iranian Rialstrategy trend
bullish
Interested to trade Iranian Rial Pairs? Then watch and read the following analysis,to:
EURIRR long EURO IRANIAN RIAL Bulls attacking again
LONG
JPYIRR SHORT JPY weakness continues:Strong bearish
SHORT
IRRJPY LONG Iranian Rial getting stronger vs Japanease Yen
LONG
The U.S. “maximum pressure” campaign has decimated Iran’s oil exports, falling from 2.6 million barrels per day (bpd) in May 2018, to between 600,000 and 700,000 bpd for much of the current year.
Iran’s “resistance economy” may no longer work, which help explains why the regime is more heavily relying on repression to avert the next uprising.
Currently, Iran struggles to find an appropriate economic policy to solve its problems as it remains under sanctions and lacks access to foreign reserves and international financing. The priority in the short run is to stimulate economic growth, using the fiscal space as the administration did with direct cash handouts and subsidies to some vulnerable sectors. Ultimately, the stimulus amounted to about 6 percent of Iran’s GDP.
However, the government faces revenue shortages and finances its budget through open market operations, as it has had no international creditor to finance infrastructure investment projects. Issuing money to finance government budgets led to high inflation, macroeconomic instabilities, and exchange-rate depreciation. If the administration continues to implement its fiscal policies through the Central Bank, the so-called “helicopter money” may further destabilize the economy. In other words, Iran’s “resistance economy” may no longer work, which help explains why the regime is more heavily relying on repression to avert the next uprising.
As much as Iran’s current economic woes have been a consequence of the U.S. withdrawal from the JCPOA and the re-imposition of secondary sanctions, the prospect of a new U.S. administration offers Tehran some breathing room as President-elect Biden may return to the JCPOA if Iran steps back to its strict compliance with the deal. But until Biden enters the White House in January, the Islamic Republic will have to resist Washington’s “maximum pressure” campaign with its “resilience economy,” is very much directed by its military apparatus businesses. A major share of economic activity in Iran is run by very large semi-public companies, the so-called Foundations (Bonyads) and Executive Headquarters (Setads) whose leadership is appointed by the Supreme Leader from the ranks of former commanders of the Islamic Revolutionary Guards Corps (IRGC). These companies are usually exempt from taxes on turnover or value added and they have several holding companies active on the Tehran Stock Exchange. It is expected that these companies will steer the “resistance economy” through the ongoing crisis, which may further corruption at the highest levels of power.
At the same time, Tehran has been boosting its domestic security, as it fears the next, potentially more intense, wave of street protests. The pandemic has acted as a catalyst here, as the poor and unemployed have seen their conditions deteriorate further, effectively stirring the feeling that they have nothing else to lose. Protestors in the last two nationwide upheavals in Iran hailed mostly from poorer segments of society, and this has become a top security threat for the Islamic Republic.
