The High Council of Economic Coordination gave the Central Bank of Iran additional authority to restore calm to the chaotic currency market.
The council is the ad hoc decision-making body comprising the heads of the branches of power. It convened late on Wednesday amid renewed turmoil in the currency market, IRNA reported without elaboration.
It is not clear what the CBI can and would do to return a semblance of calm to the forex market that has seen more than its fair share of volatility in the past several months.
The move is expected to give the regulator more power to control the currency market, which has also impacted the domestic gold market.
Observers ascribe the rising trend in asset markets to the runaway inflation and concern among the public of higher prices on the way.
The uncertain future of Iran’s nuclear deal has agitated investors giving rise to pessimism about reaching an agreement with the world powers in the near future.
On the sidelines of the weekly Cabinet meeting on Wednesday, Ali Salehabadi, the CBI governor, confirmed that “special authority” will be given soon to the CBI to intervene in the currency market.
Resounding to the new bout of volatility in the forex market, Salehabadi said the regulator will boost the supply side in the coming days.
High Council of Economic Coordination has banned forward trade in gold to control the new volatility in the bullion market
“Given that our forex revenues have improved, we will increase its access in the market,” he was quoted as saying by the CBI website.
The US dollar jumped to as high as 317,000 rials in the Tehran’s unofficial currency market on Thursday, almost 3,000 rials shy of the all-time high of 320,000 rials. Saturday and Sunday were public holidays in Iran. The greenback has gained more than 5% over the past ten days.
The euro is worth 339,800 rials in the free market, the GBP bought 395,900 rials and the UAE dirham was quoted at 86,300 rials.
To exercise control over currency market, Iran Currency Exchange, the regulated market, said its official exchange bureaus were open on Sunday to offer currency services despite the holidays.
The ICE is a CBI-affiliated spot market operated by a network of banks and certified moneychangers dealing in wholesale currency. The dollar was quoted at 260,100 rials in the regulated market up 0.3% on the session before. One euro was worth 282,300 rials.
Local news outlets reported that the top council has banned forward trade in gold to control the new volatility in the bullion market.
The government earlier officially banned forward deals in foreign currency. Forward deals are contract between two parties to buy or sell an asset at a specified price on a future date.
Prices in the domestic bullion market have increased in tandem with currency rates in recent days. The Emami gold coin clawed back above the critical 150 million rials on Wednesday and was quoted at 151.2 million rials -- the highest in 18 months.
Half Bahar Azadi coin was traded at 85.5 million rials and one gram of 18-karat gold was sold at 14.30 million rials.
