After reaching new peaks in the last trading session, advance of the dollar against the national currency paused at the start of new trading week.
The US currency dipped more than 4,000 rials on Saturday and was quoted at 295,500 rials in the open market across the country or down 1%. It had gained more than 5% last week to post an all-time high of 300,000 rials on Thursday.
Other major currencies also retreated. One euro fetched 345,400 rials, dropping 1.4% or 3,550 rials compared to Thursday’s close. The UK pound sterling was down 0.4% at 382,000 rials.
The greenback was tagged 284,520 rials at licensed exchange bureaus affiliated to the Central Bank of Iran, down 1.65% compared to the earlier session.
Pause in forex rates is attributed to the dollar touching an unprecedented level on Thursday. The Persian-language economic newspaper Donya-e-Eqtesad pointed to investor nervousness over the strong intervention of the central bank as the dollar moved closer to 300,000 rials level. Citing market analysts, the newspaper said “from the view of investors, this threshold is seen as a redline by the regulator” which if crossed could again call for CBI intervention via currency infusions.
Forex rates in the domestic currency market are influenced by peers in neighboring countries, according to the economic news website eghtesadnews.
News reports Saturday said the dollar opened 1% lower in Afghanistan’s Herat Province, which seemingly sent a negative price signal to Tehran’s market, the news website said.
Dollar trade in Herat has gained traction for Iranian dealers, more so because currency trade in Herat begins sooner in the day than Tehran.
‘Negative Climate’
Reacting to the unending appreciation of all major currencies against the tanking rial, the CBI boss Abdolnasser Hemmati, again blamed the perpetual chaos on bargain hunters and middlemen wanting to “spread a negative atmosphere in the market”.
Hemmati on Friday also pointed to reports in the foreign media about the US administration’s new plan to further remove Tehran’s financial system from the outside world.
He referred to a Bloomberg report earlier in the week, claiming Donald Trump and his minions have plans to impose fresh sanctions on Tehran that target moneychangers and the informal money transfer system used in many Muslim countries known as the hawala.
However, the new hostile plans were made before Covid-19 came to the White House and Trump and his wife tested positive on Friday. The embattled president was airlifted to a military hospital.
Gold Slips
Following decline in forex rates, gold coin prices also declined. The Emami gold coin on Saturday retreated to 148 million rials losing 4 million rials or 2.71% compared with the previous session.
The Emami gold coin had hit an historic high of 152 million rials on Thursday. Higher demand for Emami coin had caused the precious metal growth to surpass currency rates and increased the risk of a bubble. Experts say the Emami gold coin is traded 10 million rials above its real value.
Bahar Azadi gold coin remained almost unchanged for the day and was quoted at 140 million rials. Likewise, one gram of 18-karat gold lost 1% to reach 13.39 million rials.
