Rise of the US Dollar and Significant Fall of the Stock Market in Tehran

After a month of strengthening the exchange rate of the rial against the dollar, as well as a rise in the stock market index, both markets in Iran faced turbulence on Tuesday, March 26. The dollar rate reached 3400 tomans on Tuesday, rising from 3270 tomans on Monday. Last month, each US dollar was traded at around 3550 tomans in the free market of Iran. It is still unclear why the exchange rate of the rial against the dollar, which had significantly strengthened ahead of Nowruz, suddenly fell on Tuesday. However, during the past month, the price of the OPEC oil basket increased by 22%, and this relatively high price, which fluctuated around 55 dollars, continued until a few days ago, but global oil prices have decreased again. According to statistics from the official website of the Organization of the Petroleum Exporting Countries (OPEC), the price of this organization's oil basket fell below 50 dollars for the first time in a month and a half yesterday. Iranian media have recently spoken of increased hopes for a nuclear agreement, as well as Iranian traders' hesitation to buy dollars due to the possibility of further strengthening the rial against the dollar and ultimately an optimistic atmosphere for the lifting of Western sanctions as factors that contributed to the rial's strength against the dollar. On Tuesday, the Tehran Stock Exchange index, which had significantly grown over the past month, suddenly fell. The stock market index had risen from 64,000 to 65,000 units in the past month, but according to the official website of the Tehran Stock Exchange, this figure fell by about 3600 units on Tuesday. The stock index dropped by 5.5% in one day, now falling to 61,500 units. In this context, the Iranian Students' News Agency (ISNA) reported that following the reopening of refinery companies' symbols, the Tehran Stock Exchange experienced severe drops and faced price declines and reduced demand. The report adds that in today's Tehran Stock Exchange transactions, refinery companies returned to the glass hall after a 9-month halt, causing a significant drop in prices and declines in stock indices. The report states that experts had predicted declines of over ten thousand units on the reopening day of the refineries, and this was mitigated by the growth of some shares and block trades. Meanwhile, after providing information from six refineries to the Stock Exchange Organization and announcing the reopening of this group, and due to the forecasts provided, the stock prices of this group experienced a heavy drop, as in addition to the refineries lagging behind the negative trend of the stock market, their profit forecasts were presented in several scenarios and were accompanied by many ambiguities. ISNA writes that this event, along with shareholders' need for liquidity, caused the refineries to experience the most significant price declines and have a substantial impact on the stock market's drop, such that the Isfahan, Bandar Abbas, and Tabriz oil refineries affected the stock index by 1447 to 279 units.