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Iran: Stock market crash triggers new crisis

Iran's stock market map
Iran's stock market map

Reporting by PMOI/MEK

Iran, January 20, 2021—Tehran Stock Exchange’s (TSE) main index, TEDPIX, plummeted by more than 36,000 points on Monday, marking the acceleration of a collapse that has followed a bubble growth during the summer. On Tuesday morning, the index further collapsed by 18,000 points in the opening hours. The market had seen another 40,000-point drop on January 16.

Shortly after Tuesday’s opening, outraged who are now seeing massive losses after the regime gave hyped-up promises of a booming stock market, held a protest rally in front of the SEO building in Tehran.

The protesters were chanting, “[regime president Hassan] Rouhani is stealing and the police supports him” and “Forget about the nuclear deal Hassan [Rouhani], don’t steal from us.”

 

The collapse of the stock market has triggered a new crisis among regime officials, who are now resorting to their usual blame game to vindicate themselves and incriminate others for the current situation.

Following the two-day stock market crash, Hassan Ghalibaf, the head of TSE and the Securities and Exchange Organization (SEO) quit both posts. Ghalibaf had declared his resignation in October, citing the government’s meddling in the stock market as the reason for his decision.

During Tuesday’s meeting in the Majlis (Parliament), Rouhani’s rivals slammed his government for the current situation. MP Ahmad Nader said, “The government encouraged the people to invest in the stock market and dragged the people’s wealth into the slaughterhouse casino of the government. The government must be held accountable.”

Parliament speaker Mohammad Bagher Ghalibaf, said, “We will not accept the current situation of the stock market and the government must be held accountable. The government officially invited the people to invest all they have in the bourse. And then, with their mismanagement, they dealt a blow to the people’s trust and depreciated their assets.”

Protest by investors in front of the Securities and Exchange Organization, Tehran

Protest by investors in front of the Securities and Exchange Organization, Tehran

Ali Nikzad, the deputy speaker of the Majlis, said that Rouhani’s minister of economy and the head of the SEO will be called in for a hearing to explain the situation of the stock market.

A government-induced bubble

In April, while the value of shares were skyrocketing and economy experts were warning that the bubble will burst, Rouhani said, “Don’t listen to what they’re saying. They are mad that our stock market is flourishing and they’re saying stock markets across the world have been disrupted. Iran’s stock market is flourishing because of the activities of economic players.”

The regime’s supreme leader Ali Khamenei also joined the chorus and in October had encouraged the public to invest in the stock market.

While MPs continue to blame each other and their rivals for the current situation, the reality is that the regime in its entirety is to blame for the situation. The government is faced with a massive budget deficit. The obvious way to solve this deficit would be to reduce the budget of destructive and unnecessary activities such as missile development and funding of terrorist groups. But instead, the regime is resorting to other tactics to offset the deficit, all of which are coming at the expense of the people. The artificial boom and bust of the stock market, which has caused massive benefits to regime-linked organizations that pulled out their investments early, is in the context of a wave of deceitful tactics meant to steal what little the Iranian people have left in their accounts and pockets. Some of these methods include manipulation of the currency exchange rate, unbalanced adjustment of pensions, and increase of taxes on different goods.

But as Tuesday’s protests and ongoing protests across the country show, the people’s patience is wearing thin. And the regime knows that stretching its destructive policies too far will result in a violent backlash.