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Iran's new budget to focus on privatization, subsidy reforms

Iran's economic outlook remains uncertain amid fluctuating oil prices and continuing nuclear negotiations, while officials are looking to create a law that would make the country’s state budgets independent of oil export revenue.
EDITORS' NOTE: Reuters and other foreign media are subject to Iranian restrictions on their ability to report, film or take pictures in Tehran. 

Investors look at an electronic display board, reflected in a glass partition, at the Tehran stock exchange September 15, 2010. Picture taken September 15, 2010. While U.S. diplomats were busy upping Iran's economic punishment over nuclear activities Washington fears are aimed at making a bomb, Iranian shares, which might have been expected to fall, have, instead,

The Iranian economy has embarked on 2015 with a number of challenges that will directly influence the overall economic performance of the country. Low and falling oil prices as well as the wait-and-see mode in the nuclear negotiations are inducing massive uncertainties into Iran’s economic outlook.

Since the extension of the nuclear talks on Nov. 24, the Iranian rial has lost 7% of its value on the free currency market and is now trading at 35,000 rials to the dollar. The concern about the outcome of negotiations as well as worries about the negative impact of a low oil price on the government’s financial position are driving the market, despite reassurances by the Central Bank of Iran (CBI) that a collapse of the rial would not be on the horizon. Nonetheless, the markets are nervous and the overall trend is to use the hedging effect of hard currency investments in an uncertain economic environment. The same can be witnessed in investor behavior at the Tehran Stock Exchange, which remains a depressed capital market because of political uncertainties. In this context, the government and CBI will have to keep an eye on the hard currency and stock markets to fulfill their commitment to maintaining a degree of stability in the value of the national currency.

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