Lebanese pound drop and new UAE commercial law impact stocks

The decline in the Lebanese pound and Iranian sanctions being imposed on specific British and European individuals and entities in response to a crackdown on protests, has led to the question of whether stocks can return to bull market territory this year. While Iran is implementing tactical economic tools to address its structural and political issues, the rial continues to remain volatile due to the country’s persistent budget deficits, failed nuclear agreement and corruption, in addition to intensified western sanctions.Attempts to stabilise their currency have included injecting dollars into the market, raising limits on amount residents can exchange and introducing a fixed exchange rate. The World Bank cut Iran’s economic growth forecast for 2023 and 2024 due to slower growth in key trading partners and new export competition.

On the other hand, the United Arab Emirates’ new commercial agencies’ law is set to come into effect on June 16, promising to enhance the competitiveness and attractiveness of the country’s business environment. Despite the lure of buying tangible assets such as property and cars amidst the lack of trust in the Iranian regime and political instability, the inability to manage inflation only adds to the dwindling present conditions that could lead to further internal conflict and instabilities, causing a greater mismanagement of opportunities in the long term.