Governor of the Central Bank of Iran Abdolnasser Hemmati on Monday sought to reassure the public about stable currency rates and urged businesses to support CBI plans.
"With the efforts of my colleagues, the banking system and businesses, stability will again rule the markets," Hemmati said in a note posted on his Instagram account. He did not elaborate.
Forex and gold prices in Iran have gone through the roof in recent days with little hope that things could get better anytime soon.
In his view the current state of the forex market is not as complicated as it was in the summer of 2018. "Reimposition of [US] sanctions back then unleashed chaos in most markets. However, by employing appropriate measures we managed to restore stability to the market and bring down exchange rates."
Tehran's gold and currency markets are going through a new bout of unusual price hikes in recent weeks. The US dollar hit a 20-month high and Emami gold coin recorded an all-time high in the past week.
The greenback was priced at 177,500 rials on Monday, 2,200 rials higher than Sunday's close. The euro fetched 191,000 rials, up 3,000 rials compared with previous day's close.
Moneychangers affiliated to the CBI, however, sold the dollar at 172,000 rials and euro at 186,000 rials.
Bank-affiliated exchange shops' unexpected move to increase rates last week marked the beginning of a sharp increase in currency rates during the week.
Economic experts are of the opinion that the unusually rising rates speak of the government's desire in higher exchange rates.
Gov’t Denial
However, Ali Rabeie, the government spokesman, denied reports about government interest in higher forex rates. "Increasing currency rates has not been discussed at any meeting...[in fact] the government has always favored stability in the currency market," he said Monday.
Surge in currency rates pushed up gold prices. The Emami gold coin was tagged at 73.58 million rials on Monday, up 310,000 rials compared to the previous day's close. The precious metal has become dearer by a solid 40% in the past three months, according to Tehran Gold and Jewelry Union.
Gold prices in Iran are always influenced more by the domestic forex market and less by the international gold market where gold prices are rising as the coronavirus continues to hammer economies in ways not seen in a century.
Gold extended its rally to a fresh seven-year high on Monday after the US Federal Reserve warned of potential asset-price declines as an economic recovery could stretch through until the end of next year.
Haven demand for bullion is being supported by dismal economic data and fears over new infections, even as investors are encouraged by businesses reopening across major economies, news wires reported.
Gold’s breakout has raised prospects that it could set an all-time high soon as massive stimulus measures push holdings in bullion-backed exchange-traded funds to a record.
