Iran’s SEO urges central bank to bolster stock market

(MENAFN) Iran’s Securities and Exchange Organization (SEO) has recently urged the Central Bank of Iran (CBI) to undertake three significant measures to bolster the stock market, according to a report by Tansim News Agency. Ghader Masoumi Khanghah, director of Stock Exchange Supervision at the SEO, has emphasized the need for the CBI to allocate necessary funds to the Capital Market Development and Stabilization Fund (CMDSF). Khanghah expressed concern that without adequate liquidity, the market could face deeper crises and lose its positive resilience. He noted that while resolving fundamental economic issues could potentially reduce the need for such a fund, it is sometimes crucial for the government to intervene financially to support the market.

Additionally, Khanghah highlighted the necessity for the CBI to address the rent created by discrepancies between foreign currency prices in the free market and those in the Forex Management Integrated System (NIMA). He also called for a reduction in interest rates to prevent economic stagnation, asserting that the central bank’s interest rate decisions have a direct impact on the capital market. He underscored that such interventions are essential for maintaining market stability and preventing economic slowdowns.

Over the past two years, the Iranian stock market has faced numerous challenges, leading to diminished investor confidence. In response, the 13th government has implemented various measures to restore trust and support the market. One such measure included allocating financial resources from the National Development Fund (NDF) to the Capital Market Stabilization and Development Fund, especially as the market experienced a downward trend.

In the first four months of the current Iranian calendar year, from March 20 to July 21, the Capital Market Development and Stabilization Fund invested over 90 trillion rials (approximately USD180 million) to support the stock market. According to the latest data, the CMDSF used these funds to purchase market shares worth USD180 million, aiming to stabilize the market and support shareholders amid ongoing economic challenges.

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