Foreign exchange rates gained against the rial for the third straight day contrary to expectations about further decline and the prospects of a stronger rial following optimisms about ease of economic sanctions with the change of government in the United States.
On Tuesday the US dollar gained 3.97% and fetched 277,000 rials in Tehran's free market. Bank-affiliated exchange bureaus tagged the greenback at 271,000 rials.
The euro jumped 5.23% from 314,500 rials the day earlier to 331,880 rials. Melli Exchange, affiliated to Bank Melli Iran, quoted the European currency at 310,500 rials.
Currency of the UAE, the dirham, increased by 2.48% during the day to 76,400 rials while the British pound and Turkish lira were higher 5.15% and 1.53%, respectively, than the previous trading day's close.
Abdolnasser Hemmati, the CBI governor, said earlier in the week that the CBI is optimistic that forex rates would decline.
"I had warned about putting money in the forex market…rates were irrationally rising under the influence of non-economic factors," he said. Currency rates are expected to fall further, which also is favored by the CBI, he added.
"The CBI will be able to control the currency market and stabilize rates after non-financial factors lose their clout," Hemmati said.
Gold Down
Unlike foreign exchange rates, gold coins prices did not change much on Tuesday. Emami gold coin was sold at 133 million rials in the market -- 0.76% lower than the previous day.
Half Bahar Azadi gold coin made a slight gain and was quoted at 73 million rials, up 500,000 rials or 0.68% compared with Monday's close. Quarter Bahar Azadi lost 1 million rials to be quoted at 50 million rials.
Analysts usually consider forex rates as the key factor when it comes to gold prices in Iran. However, this time around the domestic bullion market seems to be more impacted by fluctuations in the international markets.
Gold had fallen sharply on Monday as optimism over a Covid-19 vaccine lifted appetite for riskier assets.
The precious metal rebounded on Tuesday, rising more than 1%, as investors bet on continued monetary support from central banks to revive the pandemic-hit global economy in which millions of livelihoods, jobs and businesses have been lost and entire communities have been pauperized.
