What is the forecast of the markets in the second 6 months of the year / what is the intrinsic value of the dollar price? – Tejarat News

According to Tejarat News, in a situation where the economic growth in the first four months of this year was around two to three percent, and this amount is less than last year, the markets have plunged into an unprecedented recession. Factors such as the lack of transparency in the JCPOA agreement, the growth of capital outflow from the country and the reduction of social capital have fueled the economic stagnation.

This is despite the fact that the approach of government officials in the last eight months is aimed at improving political relations and resolving disputes with other countries in the region. According to economic experts, solving the challenges facing Iran with other countries can stabilize the price trend in the financial markets, but the economy goes its own way and political issues have a temporary effect on these markets.

Meanwhile, the experience of the dollar price as the main price driver in the markets shows that political news creates short waves in the markets. It seems that economic activists are waiting for the Achilles heel of the financial markets, i.e. the removal of sanctions, so that recessionary conditions will lead to a fall in prices.

Although economic analysts do not consider simply removing sanctions from the economy as a cure for improving the situation and believe that the cause of chronic diseases of Iran’s economy, such as inflation, is more affected by the country’s monetary policies than economic sanctions!

In this regard, Javad Fallahian, a lecturer, analyst and financial market activist, explains the reasons for the stagnation in the country’s markets. The focus of this discussion is the stagnation in the dollar, gold and coin, stock market and housing markets. You will read this conversation further.

crossing the floor of 47 thousand tomans; Far from economic realities!

It seems that the price of the dollar is locked in a price triangle and has fluctuated continuously in this area in the past months. Do you think this issue is the policy of the public sector or is the currency market in recession?

Recession conditions in the economy have caused the number of purchases and sales to decrease in all markets, and the dollar is no exception. It should be noted that in other markets, especially housing, buying and selling has decreased drastically. Usually, when the economy is in recession, the demand in the market decreases a lot; In the meantime, due to the decrease in demand, some people want to convert dollars into rials and are even willing to sell their dollars at lower prices. At the same time, there is no excitement and selling pressure in the market.

Nevertheless, it seems that the ultimate drop in the price of the dollar can be up to 47 thousand tomans, and according to the conditions we see in the economy, lower than this amount is far from economic realities.

What is the reason for the widespread recession in the markets?

Currently, every market is witnessing this stagnation, and the reason for this is due to the severe contraction policies that the government formulated and applied in various markets in the last few months.

According to the report and economic statistics of the Central Bank in the past weeks, we observed that liquidity has increased and reached 6,300 billion tomans. This high growth of liquidity while we do not have an increasing factor and has even decreased, but due to contractionary policies, its spring is being compressed.

During this period, the government started printing money and the monetary base reached about 860 billion tomans and grew by 30%. All the factors show that nothing special has happened in our country and the amount of liquidity and monetary base cannot experience lower prices according to the dollar. This reduction is also due to contractionary policies and recession that has occurred in the market.

Economic experts always consider the second 6 months of the year as the beginning of the increase in the price of the dollar. Are the high targets predicted by these people for the dollar and other markets true?

What was previously announced by the experts for the second 6 months and the end of the year is not far from the mind. If we want to check the past years, usually in August, the price of the dollar decreases mentally. Compared to previous years, the demand in the foreign exchange market usually increases in September.

What factors are effective in determining the price of the dollar?

What do you think is the intrinsic value of the dollar price?

In relation to this issue, it is not really possible to give a definite opinion and it depends on various factors. The discussion of the monetary base, the balance of payments and the calculation methods that exist determine the real value of the dollar; But based on the current interest rate, the price of 55 to 60 thousand Tomans can be a reasonable range for this banknote. Although this value is expected to increase by the end of the year.

Doesn’t the policymaker act to maintain the current price range and prevent the growth of the dollar in the second 6 months?

In economic data and policy, when any economy experiences strong inflation and growth, it usually goes into recession for a few months. In recent months, especially at the end of last year, we saw inflation and price increases in all markets. Therefore, after last year’s inflation and price growth, we are witnessing the current recession.

This recession also takes place through the central bank. In other words, the increase in interbank and bond interest rates has caused people to be more willing to save and receive fixed income benefits than to bear the risk of the markets after price growth.

Of the signs of recession The pulse is limited by the price

The gold market has fallen more than the dollar. Due to the compliance of this market with the price of the dollar, this banknote has a lower yield. How do you interpret this decrease in gold and coin Sharpie?

If we mean coins, during the past years we always had a bubble in the price of coins. Usually, the bubble becomes bigger in growths and smaller in falls. Therefore, despite the correlation of the dollar price with gold and coins, when the dollar goes down, the intensity of the coin price decrease increases. For this reason, we see stronger drops in the yellow metal market in the drop of the dollar.

What is your prediction of the global gold market? Will the price of Anas increase in the coming months?

The issue of Anas is exactly like the devaluation of the dollar in the world markets and there is no noticeable difference. Recession conditions are like this. Now we want to check in the stock market one day the market is positive by one to two percent and on other days it goes down by three to four percent. In fact, one of the criteria of recessionary conditions is limited price fluctuations. Therefore, this price reduction until the noticeable demand in the market does not enter, these limited price fluctuations are normal.

Increasing the systematic risk of the stock market by relying on the news

You mentioned the stock market; What is your analysis of the conditions governing the stock market? Considering that many economic experts consider the efficiency of this market and investing in it to be more economical than financial markets.

The stock market is actually going through an era that activists have never experienced. Some news enters the market from different sides, which greatly increases the systematic risk of the market. Sometimes we see that decisions are made in the government body and in a way a kind of self-mutilation takes place in the economy.

Perhaps the most important of them is the issue of petrochemical feed rate, which was set at seven thousand tomans at once and after more than three months, the decree was amended. When the risk of the petrochemical industry increases due to the government’s decisions, it affects other industries as well. About 30% of the country’s stock market value is related to petrochemical and chemical industries, and 20% is related to chemical industries. Therefore, about 50% of the market depends on this industry. When this industry threatens to lose, it affects the entire market.

The requirement to reassess the assets of stock companies is an issue raised by the head of the stock exchange organization, who intend to include it as a law in the 7th plan. What effect will this action have on the capital market?

This issue may be positive at first sight and cause the market to jump, but after the exemptions of the companies are over after five years, if they want to reassess the equipment, it will definitely cause losses to the companies due to the increase in depreciation. But it seems that this law is not included in the seventh schedule. Because the government is facing budget deficit problems and revaluation means zero tax for the government. This requirement seems to have little compliance with the government’s conditions and may not be approved.

It should be noted that the capital market is looking for a good news. We see that in the last one month we have not seen a strong fall and strong growth. The good news could have been anything; Lowering interest rates, canceling petrochemical feedstocks, or supporting market giants by injecting money into the market.

People can’t afford to buy housing

Why is the recession in the housing market more intense and the market that has been most negatively affected by the current situation is the housing market?

Because the amount of transactions in the real estate market is extremely high and not all people can afford to buy real estate. Therefore, this recession has shown itself strongly in the housing market. Of course, all trades, from detergents to electronics and factories and parts sellers, are witnessing this recession.

It should be noted that we observed a few degrees lower than this stagnation in the early 90s and during the first term of Rouhani’s presidency and Tayyabnia’s responsibility in the Ministry of Economy. But the current recession is more severe than that era and all people are affected by it.

We have always had price spikes after recessions, and markets have not experienced declines. Do you believe that after this increasing period of recession, the price growth trend will not be sharper?

The main reason is that our economy is not just witnessing stagnation or just inflation, but it is witnessing inflationary stagnation. This issue is also a problem that the country’s economy has been dealing with for more than a decade. Governments usually create recession to control inflation. That is, they control the factors that control inflation. But in Iran’s economy, they create recession, but we cannot control the factors that control inflation, such as the monetary base, liquidity, increase and improvement of the balance of payments.

Will the price spring be released?

What are the consequences of this inability and lack of coordination of policymakers in the process of recession?

Recession occurs and at some point the prices remain constant and even decrease; But after some time, this spring that we compressed due to the lack of control of factors causing inflation will be released. In fact, in the next stage, we see a sharp inflation jump in the market and it causes the prices to increase.

In the economy of developed countries, inflation originates based on fundamental factors. In these countries, in recession conditions, inflation and the means of causing recession, which are interest rates and bond rates, are controlled. After controlling inflation, the country moves towards economic growth and increasing GDP. But unfortunately, in our country during the recession period, the factors causing inflation are not controlled. Maybe because part of our economy is embargoed and governments are not able to control these factors. Maybe it is the reason for mismanagement and wrong decisions made by the government. As a result, in the condition of inflationary stagnation, only the inflation spring becomes more compressed.

How long do you expect the recession to last and how long do you think the policymaker can maintain these conditions?

If we want to observe the time periods of inflation and stagnation, the further we go, the more these periods decrease. If this happened at the end of Ahmadinejad’s second term, and during Rouhani’s presidency, we witnessed price jumps at the beginning of the second term; It seems that due to the reduction of periods of recession and inflation, maybe we will see the jump of this spring in one year at most.

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