Tribune- Financial Journal

Iran Gov’t ETFs Get a Facelift The Cabinet has approved proposals by the Securities and Exchange Organization (SEO) for reforming the governing structure of the two major exchange-traded funds of the government. Majid Eshqi, the SEO chief, made the announcement Monday in a talk with state TV, expressing the hope that the changes would help lead to better functioning of the two major funds. The government-affiliated ETFs were listed in capital market in mid-2020 and hold stocks in giant state-owned refineries and banks. financialtribune.com/node/115190 @fintribune

Construction PMI Bounces Back Above Threshold Latest data released by the Iran Chamber of Cooperatives on Purchasing Managers’ Index for the construction sector shows the index has bounced back above the threshold (50-mark). The index settled at 51.11 in the fifth month of the current fiscal year (July 23-Aug. 22) up from 46.7 in the preceding month (June 22-July 22), indicating a 9.44% increase. PMI is an indicator of the health of economic sectors and provides information about business conditions to decision-makers, analysts and purchasing managers. financialtribune.com/node/115181 @fintribune

Determinants of Inflation in Iran and Policies to Curb It High and volatile inflation in Iran has been an endemic economic and social issue that has contributed to rising poverty and social tensions. Iran’s CPI inflation has fluctuated sharply over the past two decades around its annual average of 20% (Figure 1.a.), and has been much higher than that of Iran’s emerging market and regional peers (Figure 1.b.). With the Covid-19 pandemic hitting Iran’s economy on top of preexisting US trade and financial sanctions and exacerbating the supply constraints, its annual CPI inflation reached nearly 50% at the end of FY 2020-21 (Iranian year that ended on March 20, 2021) and averaged 40% during FY 2021-22 (Iranian year that ended on March 20, 2022). Coupled with low economic growth and high unemployment, rising inflation has fueled widespread protests in the country amid a significant erosion in purchasing power. The new government that took office in August 2021 identified tackling inflation as a key economic priority, reads a working paper published by the International Monetary Fund. Excerpts follow: financialtribune.com/node/115165 @fintribune

E3 Statement Undermines Good Faith Efforts to Revive JCPOA financialtribune.com/node/115164 @fintribune

Cellphone Registry Disruption Troubles Buyers, Businesses Some cellphone buyers could not register their devices via the system named Hamta, which caused problems for both buyers and sellers. Recently, Hamta notifications faced wide-scale disruptions, which created financial and legal risks for cellphone buyers, ICT News Agency reported. Operators of the cellphone registry system have admitted that the problem mainly concerns the SIM cards of Hamrahe Aval, the brand name used by the Mobile Communications Company of Iran, which is a subsidiary of the Telecommunications Company of Iran. Apparently, TCI’s financial disputes with the Ministry of Industries, Mining and Trade and the Ministry of Information and Communications Technology have given rise to such a problem. financialtribune.com/node/115161 @fintribune

Concern Over CBI’s Crypto-Rial Agenda While the Central Bank of Iran plans to pilot its long-awaited central bank digital currency (CBDC) project, the Crypto-Rial, by November, experts has expressed strong reservations about the practicality of the move and its anticipated positive impact on the economy. According to Ali Salehabadi, the CBI boss, the bank has in place infrastructure and rules for the Crypto-Rial. The cryptocurrency is planned as a new type of national currency, like banknotes and coins, but fully digital. Based on what is known about the CBI crypto agenda, the digital currency is not designed to compete with global cryptocurrencies. Unlike bitcoin and other cryptos, CBDCs are centralized, not anonymous and in accord with anti-money laundering requirements. financialtribune.com/node/115168 @fintribnue

Tehran’s Real-Estate Market in Q4 of Fiscal 2021-22 Surveyed The Statistical Center of Iran has published a new report on home and land prices, as well as rent levels in Tehran’s urban areas, during the fourth quarter of last fiscal year (Dec. 22, 2021-March 20). According to the report published on SCI’s website, the average price of each square meter of land or land of a rundown residential property (residential units that are considered old to a degree that only the underlying land is useful for construction) in Tehran went up by 17.1% in Q4 compared with the corresponding period of the year before. Prices increased by 4.8% against the preceding quarter (Q3). The minimum price of each square meter of land or land of a rundown property stood at 46.05 million rials ($151) and the maximum was 2.62 billion rials ($8,641), bringing the average to about 521.74 million rials ($1,720). financialtribune.com/node/115163 @fintribune

Savers Are Less Inclined to Park Money in Banks Data released by the Central Bank of Iran show term deposits increased at a much slower pace than sight deposits, another sign that savers are less inclined to park their money for longer periods in banks. Total sight deposits reached 10,935 trillion rials ($36.4 billion) by the end of the fourth calendar month to July 22. This was 61.4% higher on the same period last year. Sight deposits increased by 21.5% compared to the end of last fiscal year in March. Term deposits lagged rising 32.5% to reach 40,681.4 trillion rials ($135.6b) by July 22. The rise was a fifth of sight deposits in the four months. financialtribune.com/node/115166 @fintribune

Iranian PMI Declines for Third Consecutive Month The Purchasing Managers' Index for Iran’s economy has declined for the third consecutive month to break below the 50-mark threshold. The latest survey of the Statistics and Economic Analysis Center of Iran Chamber of Commerce, Industries, Mines and Agriculture — the sponsor and coordinator of PMI reports in Iran — shows the index (known by its Farsi acronym Shamekh) settled at 48.06 in the fifth month of the current Iranian year (July 23-Aug. 22), down from 50.10 registered in the previous month, indicating a 2.04-point or 4.07% decline. PMI indicates the prevailing direction of economic trends in the manufacturing and service sectors. The headline PMI is a number from 0 to 100, such that over 50 indicates an economic expansion compared with the previous month. A PMI reading under 50 indicates contraction and a reading of 50 implies no change. financialtribune.com/node/115148 @fintribune