After a one-day hiatus, foreign exchange rates soared on Wednesday at Tehran’s free market, which also pushed up prices in the bullion market.
The US dollar advanced to as high as 317,000 rials, up from 311,000 rials in the previous session to post 1.8% gain in the day. The greenback has gained more than 5% against the national currency over the past week.
Observers ascribe the uptrend to rising inflation expectations among the public, which have intensified demand in currency and bullion markets, as people seek safe havens to protect their savings against the continuing devaluation of the national currency.
Reacting to the new bout of volatility in the currency market, Central Bank of Iran Governor Ali Salehabadi said the regulator is primed to tame the volatilities, the CBI’s website reported.
Talking to reporters on the sidelines of the weekly Cabinet meeting on Wednesday, he said the regulator will boost the supply side in the coming days.
“As our forex revenues have increased, we will increase the market supply,” he added.
The top banker noted that “special authority” will soon be given to CBI to intervene in the currency market.
Other major currencies also gained on Wednesday. Euro climbed 1.6% to end slightly above 340,000 rial at Tehran’s open market. British pound fetched 403,100 rials, gaining more than 1.6% and UAE dirham was the best gainer, rising close to 2% to buy 87,100 rials.
The greenback was quoted at 259,100 rials in the regulated forex market, indicating a 0.23% increase compared with the previous session.
The market is a CBI-affiliated spot market operated by a network of banks and certified moneychangers dealing in wholesale currency.
Prices in the exchange bureaus affiliated to CBI rose slightly with the Melli Exchange quoting 259,650 rials for 1 USD, gaining 0.07% compared with the earlier session.
The domestic bullion market rose in tandem with the spike in currency prices. The Emami gold coin clawed back above the critical 150 million rials on Wednesday and closed at 150.6 million rials, the highest in the past 18 months. The popular coin gained more than 1% or 1.55 million rials.
Half Bahar Azadi coin was up close to 0.6% or 500,000 rials to reach 85 million rials and one gram of 18-karat gold was sold at 14.42 million rials, indicating a 1.1% rise against the last session.
Gold hit its lowest in nearly two weeks on Wednesday at global markets. According to Reuters, spot gold was down 0.2% at $1,833.86 per ounce, as of 0425 GMT, after hitting its lowest since May 20 at $1,832.38 earlier in the session. The US gold futures fell 0.7% to $1,836.20.
