The US dollar pared more of the early gains against the national currency amid efforts by the Central Bank of Iran to intervene in the market and balance rates.
It was traded at 281,000 rials in Tehran’s open market on Monday, indicating 3.2% decline compared with around 300,000 rials quoted a session earlier.
The euro lost 10,000 rials, or 3%, to reach 333,500 and the UK pound sterling was quoted at 378,500 rials, down 2.4%, eghtesadnews reported.
Decline in the UAE dirham could be a potential factor behind the retreat of major currencies. The Emirati currency retreated below the critical 80,000-rial early Monday and was worth 77,500 rials, down 2,500 rials, or 3.3% compared to the earlier session.
The dirham is perceived as an important currency given that the Persian Gulf Arab state is traditionally a trade hub for Iranian businesses.
Reverse Course
At authorized exchange bureaus the dollar was down 3.65% to reach 279,780 rials on Monday. Major currencies started the downward spiral on Monday of last week after the USD reached an all-time high of 320,000 rials. They reverse course followed CBI intervention through currency infusion in the market. The central bank says it has injected millions of dollars in the highly chaotic market in the past two weeks to try and balance the near permanent rising rates.
Despite the declining trend in the unofficial market, currency rates continued to soar in the secondary foreign exchange market, known locally as Nima.
Nima is a trade platform supervised by the CBI and used as a venue where companies sell their export earnings at rates lower than the open market.
A US dollar was worth 268,311 rials at Nima on Monday, indicating a 6.38% rise or 16,000 rials, compared with the previous session, according to the Tehran Gold and Jewelry Union website.
Forex rate volatility intensified in recent months after the US announced fresh sanctions against Iran’s financial sector, targeting 18 Iranian banks.
Observers say higher currency rates at Nima encourage companies to sell more export earnings for higher gain.
Gold Down 6%
Gold prices also declinesdon Monday. The Emami gold coin fell by 9 million rials to be worth 137 million rials, posting more than 6% decline. It had reached a record high of 162 million rials last week.
Bahar Azadi coin lost 3.8% to reach 129 million rials and one gram of 18-karat gold was quoted at 12.63 million rials, down 4.2% compared to the earlier session.
In international markets, gold edged up on Monday as growing fears over a second Covid-19 wave countered a firmer dollar and a lack of headway on a US stimulus package to combat the economic impact of the pandemic.
Spot gold rose 0.2% to $1,904.71 per ounce regaining some ground after earlier falling to its lowest since Oct. 15, at $1,890.19, Reuters reported. US gold futures were up 0.1% to $1,907.
