Iran’s Palermo approval heralding economic stability, diplomacy clout
Iran’s accession to the United Nations Convention against Transnational Organized Crime, long tied up in political wrangling, has now opened new doors for the country’s economy — a breakthrough greeted with a green light from the financial markets. Hopes are running high that with the approval of the final bill for Iran’s membership in the Financial Action Task Force (FATF) — namely the “CFT” — fresh opportunities will come through for economic players.
The Palermo Convention, as it is widely known, had been caught in the crossfire of Iran’s political and legal disputes for years. At one point, the system opted to put it on ice in the Expediency Council, leaving it to gather dust for years. But in the current climate, on grounds of national interest, this deadlock has been broken, and the Palermo approval has formally moved to the implementation stage.
The decision to join the Palermo Convention has acted not only as a legal milestone but also as a powerful signal to domestic and international markets. Financial markets reacted swiftly, with the dollar and Tether rates falling. On the global stage, the FATF, after six years, has once again extended an invitation to Iran for in-person talks.
Stability signal to
domestic markets
Palermo’s approval came at a time when Iran’s financial markets were grappling with chronic volatility, high inflationary expectations, and deep investor mistrust. The decision effectively sent out a “stability signal” to economic stakeholders, with its psychological impact immediately visible in currency trading, the stock exchange, and even the gold market.
The drop in dollar and Tether rates in the days following the approval was not merely the result of short-term shifts in supply and demand; analysts believe it signaled a reduction in negative expectations among traders.
Page 3