It seems that the fundamental floor of the dollar rate is 26900 Tomans. In other words, in the short term, no matter how much the dollar exchange rate decreases, when it approaches this number, it will face a very heavy resistance. Above this rate, in the current situation, the dollar is not sold by oscillators. But if this channel is broken, we will see high sales and supply in dollar transactions. For now, in the short and medium term, I have to consider this rate as the fundamental floor of the market. In the following, we will examine this issue. Please be with Artan Press.
*** The fundamental floor of the dollar exchange rate in the open market and its associated margins
The fundamentals of the dollar exchange rate in recent days have been accompanied by large margins in the analysis. Some believe the dollar will rise. While some consider the dollar rate to be twice the intrinsic value. But it is not bad to have a look at the price of dollar-dependent goods. In the six months from May (before the election) to October 1400, the general index of prices of goods and services increased by more than 20%. During this period, the price of the dollar rose by 25 percent, and according to data from the Statistics Center, food prices rose by 23 percent and services by 15 percent.
*** Commodity markets confused dollar futures
The 25 percent increase in the value of the dollar compared to before the election is an issue that is currently gripping commodity markets. This path has led to a stagflation in the country. However, the path of the dollar exchange rate in world markets is different from what is happening in the Iranian market. Investors in the world foreign exchange market last week reduced the number of US dollar Long Buy contracts by 3% to $ 24.9 billion, which is still within the 28-month record.
*** No convergence in the dollar and other international currencies
The Canadian dollar, along with the British pound, the Australian dollar and the euro, saw weekly demand rise, while the market moved away from the Japanese yen and the Swiss franc. In order to examine the fundamentals of the dollar more closely, we need to take a look at gold field transactions in the Iranian market. The price of gold fell in trading today, Tuesday, due to the growth of the value of the dollar against major world currencies. But it is still trading higher than last week’s equilibrium rate. According to the latest update of the Central Bank, the purchase price of dollar remittances on Tuesday, November 25, was 231,157 rials, which has increased by 387 rials compared to Monday. Sales of dollar remittances increased by 391 rials to 233,257 rials on this day.
*** Assess the fundamentals of the dollar exchange rate and capital market developments
The average weighted weekly remittance price of the dollar on this day was 232,595 rials, which is 162 rials lower than the average on Monday. Despite the appropriateness of fundamental variables such as the price of the dollar, the growth of prices in global markets and the performance of production and sales of listed companies, the capital market is still on a fluctuating wave. Shareholders are thrilled by any news and either buy or sell emotionally without paying attention to the value of the stock. This situation will not allow the dollar market to take on the color and smell of calm.
Trading, regardless of the fundamental variables and only for news and rumors, has become a general trend in the market, and even the real fundamental labor and legal are buying and selling these days. Because this method has become the dominant method in the market and if they do not trade in this way, they will suffer.
*** Future risk of dollar exchange rate for Iran’s economy
۵۰% increase in the world price of basic goods and food and decrease in the real value of the US dollar, based on which the real price of the dollar is calculated to be more than 40,000 Tomans. Gradual elimination of 4,200 Tomans and disruption in the import and supply of livestock and food inputs, as well as the occurrence of drought. The growth of inflation in the service sector, and in particular the increase of at least 50% in the cost of renting a house as a result of the housing price bubble, is another important factor that currently allows the market to reach equilibrium.
*** Solution to solve the exchange rate problem in the Iranian market
The only way to control prices and reduce inflation is to realize the price of the dollar (below 20,000 tomans and even less). With the current dollar price, not only will the inflation rate be above 30% next year, but then high inflation rates are waiting for the Iranian economy. In the current situation, the fundamental floor of the dollar exchange rate must be respected and the market must remain loyal to this exchange rate. Any change in prices and ordering will have serious consequences.
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