Overview: Iran Analysis Weekly Report May 08, 2016
08 May, 2016
Vistar Business Monitor
Reformists and moderates fell short of winning a majority in Parliament after the April 29 runoff elections. Their plurality in Parliament nonetheless ensures that President Hassan Rouhani will face a friendlier parliament in the run-up to the 2017 presidential elections.
Results from the April 29 runoff parliamentary elections indicate that the reformist-moderate bloc won 32 seats out of the available 68, with independents and hardline principlists winning the remaining seats. The runoff elections put Parliament’s factional composition at roughly 120 reformists and moderates, 95 principlists, and 75 independents overall.
Iran’s lack of formal political parties and debate over candidates’ true political affiliations often produce different counts, but most counts agree that the reformist-moderate bloc fell short of its goal of attaining a majority of 146 seats in Parliament. Legislation in the next Parliament will therefore depend largely on how these independents, who are not formally affiliated with any one faction, vote. The Guardian Council must still certify the election results before they are official.
President Hassan Rouhani stated that the newly-elected Parliament “will have better coordination” with his administration, which will now be able to “act on the promises it has made to the people.” Rouhani also praised the fact that 18 women were elected to the new Parliament.
In a speech marking World Press Freedom Day, President Hassan Rouhani called for greater freedom of expression.
President Hassan Rouhani stated that “critics should not be sent to prison” during a speech at the Tehran International Book Fair on May 3, which marks World Press Freedom Day. Meanwhile, 230 Iranian journalists wrote an open letter pressing Rouhani to honor their votes for him by investigating the cases of imprisoned journalists. The letter underscores challenges Rouhani will face if he seeks to implement his campaign promises by institutionalizing greater social freedoms rather than intervening on a case-by-case basis. The newly elected Parliament, in which his reformist and moderate supporters enjoy a plurality for the first time in over a decade, has limited authority to change press laws as the hardliner-dominated Guardian Council must ultimately approve all legislation.
On oil production, a National Iranian Oil Company official claimed that Iran’s current daily oil production has reached a level that Oil Minister Bijan Zanganeh previously deemed appropriate for an oil freeze.
National Iranian Oil Company (NIOC) International Affairs Director Mohsen Ghamsari told reporters that Iran’s current daily oil production has reached a level of output that Oil Minister Bijan Zanganeh called an appropriate ceiling for Iran’s oil production. Ghamsari also noted that the final decision of whether to freeze production would be left to Zanganeh. Saudi Arabia, Russia, and other oil-producing countries have repeatedly called upon Iran to join an oil freeze plan in order to curb falling oil prices.
Last Monday, the Central Bank of Iran published the information of the given loans by the banking sector in the previous Iranian Calendar Year, ending on March 19, 2016. According to the CBI’s report, the total new loans have been $121 billion. These loans have been mostly distributed in the services (38%), industry (29%), business (13%), housing (10%), and agricultural (8%) sectors.
Furthermore, the Central Bank of Iran had published another report on the previous Thursday, announcing the accumulated amount of the existing loans at $205 billion, by the end of February 19 2016. The report has revealed that the total amount of the loans has increased by 13% in the first 11 months of the previous Persian Calendar Year.
The high growth rate of the money supply amount has raised experts’ concerns regard the possible outcomes. Almost 27% or $78 billion of the country’s money supply is not provided to economic sectors, which may lead to speculation in different areas. The stock market, FX, gold and housing market have been the traditional targets for speculators in the Iranian economy over the years.
The minister of economic affairs and finance, Ali Tayebnia, has said that they are preparing to unify foreign exchange rates maybe later this year in the second half. He was speaking on the sidelines of the 8th international conference of Islamic capital market held last week in Tehran.
The gap has been reduced between official and unofficial exchange rates in the recent weeks, as the dollar rate in the market is hovering 34,000 rials, while the official rate is about 31,000 rials. Tayebnia said the official rate is set to approach the market rate, and when it happens the unification of the rates would be implemented.
Table of Contents
Notes
Overview
News Highlights
Politics and International Affairs
Economy
Trade and Agreements
Economic Affairs
Macro-economy
Economic Challenges Outgoing Parliament Created for President Rouhani
Unification of FOREX Rates Likely Later This Year
Macro-economic Data
Oil and Gas
Weekly Review
Pakistan Iran LPG Deal
Domestic Affairs
Exiting the Defensive Mode
The 10th Majles
Rouhani Gets the Upper-Hand in New Parliament
Key Political and Economic Calendar
International Affairs
Why Was the Iranian Army Deployed to Syria
Laws, Regulations and Policy Updates
Sanctions
Financial Markets
Tehran Stock Exchange
Foreign Exchange Market
To subscribe the VBM Iran Analysis Report please visit http://vistarbm.com/Subscribe.aspx or send an email to contact@vistarbm.com.