Page 4 - IRANRptSep20
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1.0 Executive summary
The Islamic Republic is struggling to cope with the twin effects of the coronavirus spread and strangling sanctions levied by the US, which have hampered efforts to control people’s daily activities given the pressure they have placed on the country and its people to stay economically active.
Iran officially has the Middle East’s worst COVID-19 outbreak. It is enduring a second spike of the pandemic and has seen more than 20,000 deaths attributed to the virus according to the official logs, although documents recently leaked to the BBC indicate the number of fatalities is far higher.
Iranian President Hassan Rouhani has announced that the state of emergency imposed on the country in the face of the coronavirus (COVID-19) pandemic is to be kept in place at least until the end of January 2021.
The severe depreciation of the Iranian rial (IRR) in the face of US sanctions is driving high inflation rates in Iran. Inflation in Iran stood at 27.8% y/y in the fourth Persian calendar month (ended June 20). Average inflation in the previous Persian month was measured at 29.8%.
The IRR has continued to tank against hard currencies in recent days. It reached a record weak level of IRR255,500 to the dollar on Iran’s unofficial market on July 18. The ongoing strain of US sanctions, a second, and larger, wave of the coronavirus (COVID-19) and a string of suspicious explosions that have occurred across the country lately have collapsed public trust in the Rouhani administration.The currency that was trading at around 32,000 to the USD in 2015 when Iran signed the nuclear deal with six world powers.
Washington on August 20 pressed the UN Security Council to ‘snapback’ international sanctions suspended under the nuclear deal with six world powers, from which the US unilaterally withdrew in 2018 even though there was no presented evidence that Iran had breached the accord.
Iranian President Hassan Rouhani told International Atomic Energy Authority (IAEA) head Rafael Grossi on August 26 that Iran will continue its cooperation with the UN nuclear watchdog. At the same time, Tehran agreed to grant IAEA inspectors access to two sites that have come under suspicion amid claims that they are former secret nuclear development programme sites.
Bilateral trade between Iran and Russia has increased significantly since Iran entered into a temporary two-year preferential trade agreement (PTA) with Russia and other members of the Eurasian Economic Union (EEU) last October.
The Tehran Stock Exchange’s main index, the Tedpix, fell sharply for the fourth consecutive day on August 16 taking its overall decline to around 10%. The index for the first time climbed above two million points on August 2. Amid Iran’s economic dire straits, investors continue to pick out one of the few profit-making spheres of investment, but anxieties that a massive bubble is
4 IRAN Country Report September 2020 www.intellinews.com
