After a brief hiatus major currencies resumed rallies going back to their bad old ways in Tehran on Wednesday as CBI’s selected moneychangers demanded higher rates.
The US dollar rose to 224,000 rials in the free market, up approximately 5,000 rials compared to a session earlier to grab 2.3% gain overnight. Euro hiked about 1.5% to 250,000 rials and the UK pound sterling fetched 279,000 rials, up slightly from 276,000 rials the day earlier.
To bridge the price gap with free market prices, the so-called official selected moneychangers affiliated to the Central Bank of Iran increased the dollar rate by more than 2%.
The greenback broke past another psychological barrier and shot up to 222,000 at the CBI moneychangers, rising 4,500 rials in one day, according to market data on Tehran Gold and Jewelry Union website.
A similar trend was seen in the secondary foreign exchange market, known locally as Nima.
Nima is a CBI-affiliated platform where exporters sell their overseas currency and companies buy it for import needs. Rates at the secondary market are usually below the open market rates.
One dollar is currently sold for 168,688 rials in the secondary market and bought at 169,208 rials.
Recent reports insist the disparities in supply and demand in the secondary market are the main cause of new volatility in the already chaotic forex market, which has given rise to systemic demand in the market.
Earlier in the week CBI Governor Abdolnasser Hemmati blamed fluctuations in the foreign exchange market on discrepancies in supply and demand in the ‘hawala’ market, adding that the “rising demand for forex is the result of restrictions to contain the Covid-19 pandemic in the past months”.
However, he said currency supply in the secondary market would gain pace in the coming days as the deadline set for non-oil exporters to return their overseas earnings is fast approaching.
The CBI has given exporters until the end of current calendar month (July 21) to return their export earnings or face penalties.
ISNA reported Tuesday that about $500 million was offered on Nima in the first three days of the current Iranian business week starting Saturday.
Gold Jumps
The gold market was also bullish amid soaring currency prices and spike in the precious metal in world markets. Each Emami gold coin was sold for 105 million rials Wednesday, more than 3.5% higher compared to previous day. The benchmark Bahar Azadi climbed 2.13% to 96 million rials. One gram of 18-karat gold sold for 9.59 million rials, up 3.4% overnight.
Gold held firm near a more than eight-year high on Wednesday in global markets, as safe-haven demand was bolstered by worries over surging Covid-19 cases and hopes of more stimulus measures to combat the economic blow, Reuters reported.
Spot gold was steady at $1,793.56 per ounce by after hitting its highest since November 2011. U.S. gold futures eased 0.2% to $1,806.30 per ounce.
