Does dollarization threaten the stock market? – Tejarat News

According to Tejarat News, since the 13th government took office, a new word called economic surgery was introduced in the country’s economy. The surgery, the result of which was the infection of the country’s economy and people’s livelihood, and it did not have a favorable result. But the 13th government still insists on the clear and acceptable results of its performance and every day seeks to implement a new project to restore the country’s economic situation. The remarkable thing is that these projects have produced negative results and instead of improving the situation, they have greatly worsened the economic situation of the country.

The 13th government sought to remove the dollar from the country’s economy from the first days of its work, regardless of the fact that removing the dollar is a failed project of the previous governments.

Will the experience of 17 years ago be repeated?

To examine this issue, we must go back to the past; About 17 years ago, during the presidency of Mahmoud Ahmadinejad, the issue of removing the dollar and clearing in the country was raised.

At that time, Ahmadinejad signed a clearing agreement with various countries, but none of these agreements have come to fruition. In the 9th and 10th governments, he failed to implement his plan to remove the dollar and replace it with clearing. Now the 13th government is reviewing the failed experiences of the previous governments to record a positive performance in its record.

Reza Fatemi Amin, the former minister of industry and mining, said that “the path of de-dollarization of Iran’s economy is easy to achieve”, on the other hand, the minister of economy and other ministers of the government also agreed to remove the dollar from the country’s economy. This is despite the fact that a country with the conditions of Iran has not had the experience of removing the dollar from its economy.

It seems that the cabinet of the 13th government is still not familiar with the economic conditions of the country and they are doing trial and error. In the end, this trial and error will result in nothing but the collapse of the country’s economy and the loss of the financial markets.

The sale of oil and the export of various products of the country are often dependent on the dollar, and even clearing with other countries is done through this currency. Iran is currently experiencing heavy sanctions and in such a situation, no country is willing to do business with Iran. In such a situation, if the dollar is removed from the trading cycle and replaced by the yuan, which has a smaller share of the world economy, the situation will become worse.

The 13th government has not yet been able to implement its first promises and solve the country’s economic problems, despite these conditions, it is now seeking to remove the dollar from the economic cycle.

Only a week has passed since the president’s speech, and during this time we have seen the increase in the price of the dollar. The head of the 13th government was able to help start the increase in the dollar rate with a simple sentence, and we will probably see the price of this American banknote rise; Besides the dollar, other financial markets are also growing.

Indifference of the stock exchange to dollarization

Currently, the price of the dollar in the market has reached the range of 55 thousand tomans; This means that the profits of capital market dollar companies are increasing day by day.

The stock market and the dollar have a convergence, and with the increase in the price of the dollar, the stock market rises with a short interval, and on the other hand, with the decrease in the price of the dollar, the capital market takes a somewhat downward trend.

With these interpretations, how can the 13th government remove the dollar from the trading cycle. All companies and industries export through this American banknote, and in this situation, no country is willing to buy Iranian products with yuan or any other currency.

The problem here is that the most common currency for exchange between countries is the dollar, and de-dollarization of the country’s economy can greatly reduce the amount of exports.

With the removal of the dollar, the country’s exports will also decrease, because few countries are willing to trade with the yuan or other currencies, and most countries are looking to trade with the dollar due to the value of the dollar and economic conditions.

Finally, this decrease in exports reduces the amount of income of companies. The main point here is that most of the export-oriented companies are active in the stock market, and the decrease in profitability will cause losses to the shareholders, and this means that by changing a currency, the country’s economy will turn upside down and the amount of income will also decrease.

However, it seems that the important economic pillar of the country, the capital market, has not taken the removal of the dollar from the economy very seriously; Because after the President’s speech, the financial markets, especially the stock market, were shaken and started to jump upwards. The stock market was able to gain more than three percent on the first working day of the week; This greening of the market happened due to dollar industries and these industries made the market positive. In the next two working days, Sunday and Monday, the stock market had a great jump.

Meanwhile, in recent days, the value of small transactions has reached the level of 20 thousand billion tomans, and the market has witnessed the entry of real traders’ money every day.