Why Did the Lausanne Agreement Not Strengthen Iran's National Currency?

Radio Farda - Currency market activists and even some economic analysts expected that after the Lausanne agreement, the price of the dollar in Iran would significantly decrease. Reza Valizadeh asked economist Fereydoun Khavand why this did not happen and why stability in the currency market continued more or less? Fereydoun Khavand: There were many who linked future fluctuations in the currency market to the outcome of the nuclear talks in Lausanne. Of course, on the first working day after the signing of the nuclear agreement, there were fluctuations in the dollar rate, but it did not take long for the price of the greenback to return to above three thousand two hundred tomans. Currently, it can be confidently said that if the talks had reached a complete deadlock and the delegations involved returned to their capitals empty-handed, the dollar rate in the Iranian currency market would have soared. But the question is why, after the nuclear agreement, the opposite movement did not occur, and considering the prospect of lifting sanctions, the currency price did not collapse, similar to what happened after Iran accepted UN Security Council Resolution 598 at the end of the war with Iraq? By studying Tehran's media and listening to and reading the words of experts within Iran, we conclude that one of the very important factors for the lack of a significant decrease in currency prices is the non-finality of the Lausanne agreement. This agreement is currently implemented in a statement that is not yet consistent between the Iranian and American narratives and must be transformed into a final legal text within about three months. In this situation, currency market players have likely decided to wait for the end of the process and not make hasty decisions. Aside from the non-finality of the Lausanne statement, what other factors contributed to maintaining calm in Tehran's currency market? Another factor that likely played a role in this stability is that in the weeks leading up to the Lausanne agreement, due to the positive atmosphere surrounding the Iran and P5+1 negotiations, the dollar price in Tehran's currency market had decreased somewhat, and in fact, currency traders had already somewhat accounted for this agreement in their transactions. On the other hand, if Iran's relations with the West are to improve, the need to import production equipment and tools after several years of harsh sanctions will increase the demand for currency. Finally, it seems that senior economic officials in Iran are not particularly supportive of a decrease in currency rates. However, central bank officials have stated that they will not prevent a decrease in currency rates. Despite this statement, it appears that the main stewards of Iran's economy want the currency market to neither be caught in a dollar fever nor suffer from the shock of a sharp dollar price drop. The optimal situation, from their perspective, is to maintain stability in the currency market. A drop in currency prices would also create problems for non-oil exports. However, if the Lausanne agreement takes on a final aspect and paves the way for the return of Iran's foreign assets and increased oil exports, the government's efforts to prevent a decrease in currency prices will become more challenging.