After years of talks, the agreement on the Iranian nuclear program was signed in Vienna on July 14, 2015, paving the way for an end to the embargo against Iran. The country is expected to begin dismantling nuclear facilities by the first quarter of 2016. Then, on what has been dubbed Implementation Day, most of the economic sanctions will be lifted. These are relatively vague prospects. Nevertheless, when the business owners from Lower Saxony go to breakfast the next morning, they quickly realize that they are not alone. The lobby of the Parsian Azadi Hotel is abuzz with delegations, Frenchmen, Croats on a “fact-finding” mission, Dutch, Italian and British businesspeople. Every day, there are reports in the Tehran Times on the arrival of “groups of high-ranking visitors,” “amicable talks” and the exchange of opinions and memoranda. It is literally a run on Tehran.
The Tehran stock exchange continued its post-nuclear deal descent with the benchmark index losing 10% in the nine months through September, as daily trading volume and the average company price-earnings ratio at 5 reached new lows. The major listed sectors including autos, petrochemicals, mining and banking are all in recession “bordering on crisis,” according to the Economy Ministry, which received $100 million in industry support from President Rouhani mainly for carmakers like Khodro, which previously thrived during a joint venture with France s Renault.
The Iranian currency market is in shock with the value of the national currency once again falling against foreign currencies and the dollar trading 150 toumans higher, despite expectations that the prospect of the nuclear agreement would strengthen the touman. The fall in the value of the national currency is significant because in the past two years the government has consistently tied the economic recovery to the nuclear negotiations and reaching a deal. Now, two months after the announcement of a deal with a flurry of foreign trade missions to Iran and the easing of certain financial and economic restrictions, the public expected a rise in the value of the national currency and a fall in the price of goods and services.