Overview: Iran Analysis Weekly Report Feb 21, 2016
Feb., 2016
Vistar Business Monitor
The efforts to transform more than a decade of conservative dominance over Iran’s parliament and Assembly of experts has kicked off, as candidates officially begin their week-long campaigns before two important elections.
The Guardian Council confirmed 6,229 of 12,123 candidates to run in the parliamentary elections in its final round of qualifications review. A total of 38 candidates out of the 147 who filed a complaint had their disqualifications overturned from previous rounds of vetting. The approved parliamentary candidates have one week to campaign from February 18 until Election Day on February 26.
In the meanwhile, Supreme Leader Ayatollah Ali Khamenei defended the Guardian Council’s vetting of candidates for the parliamentary and Assembly of Experts elections. He also condemned “those inside the country who agree with the enemy’s call for the destruction of the Guardian Council.”
Reformists finalized their candidates list. Several politicians with Principlist ties reportedly appeared on Reformist candidate lists, underscoring the lack of hard party lines in Iranian politics. Reformist Policymaking Committee Head Mohammad Reza Aref defended the inclusion of known Principlists in a recently announced Reformist-moderate bloc’s list, called “Coalition of Reformists and Government Supporters.” Aref claimed these “individuals are not known as Principlists on our list, they represent the Government Supporters.” Parliamentary candidates have until February 24 to campaign, with Election Day on February 26.
Ayatollah Rafsanjani reiterated his earlier comments criticizing the Guardian Council’s disproportionate disqualification of Reformist candidates in the parliamentary and Assembly of Experts elections. Rafsanjani blamed mass disqualifications as one of the factors that have weakened the Islamic Republic’s “republican” quality over “the past few years.”
Several Friday prayer leaders used their last sermons before the February 26 parliamentary and Assembly of Experts elections to warn of foreign interference at the polls. Interim Tehran Friday Prayer Leader Hojjat ol Eslam Kazem Sedighi stated that Iran’s enemies have switched tactics from encouraging a boycott of the elections to encouraging Iranians to “vote for those who [the enemies] want.” Mashhad Friday Prayer Leader Mohammad Bagher Farzaneh called for Iranians to “elect people who have ‘death to America’ written on their foreheads when the cameras of the world turn to them.”
On the economic front, the Central Bank of Iran indicated that the money supply rose by 27.2 percent in the Iranian month of Dey, the highest increase in the past one and a half years. According to the report, the monetary base grew by 21.5 percent, up by 8 percentage point compare to the last fiscal year. The figures could lead to an increase in inflation. With the recent cut in the interest rate, a part of resources held in banks could move toward the markets, pushing inflation high again.
After months of anticipation, monetary authorities agreed to decrease interest rates. The Money and Credit Council reduced the deposit rate from 20 percent to 18 percent last week.
According to the banks agreement the new rates will be implemented from the beginning of the next Persian calendar month of Esfand (starting February 20, 2016). Moreover the lending rate will drop from 21% to 20% and the partnership loans will also witness a 2 percent drop to 22%. The 3-month deposit interest rate will remain 10%.
Table of Contents
Notes
Overview
News Highlights
Economic Affairs
Macro-economy
Monetary Authorities Agree to Decrease Interest Rates
Unifying the FOREX Rates
Time Bomb of the Iranian Economy
Four Anti-Growth Layers in Iran’s Economy
Lack of Capital
Structural Problems
State Paternalism
Growth though Oil Sales
Macro-economic Data
Oil and Gas
Weekly Review
Russian-OPEC Oil Production Freeze
Trade
Domestic Affairs
Parliament and Assembly of Experts Elections
The Concern of Participation
Coalition of Reformists and Moderates
A Touch on Assembly of Experts Election
Key Political and Economic Calendar
International Affairs
How Effective is Iran’s Strategy in Syria?
Laws, Regulations and Policy Updates
Sanctions
OFAC, Iran, and Foreign Banks
Tax Incentives for Foreign Investors
Financial Markets
Tehran Stock Exchange
Investment Potential
Foreign Exchange Market
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