Foreign currency prices continued to fall against the rial on Monday across Iran as panic selling took on new momentum.
The US dollar plunged to 215,000 rials, losing 13,000 rials or 6% in one day. That was the lowest price since August 9. The greenback has lost more than 12% of its values since last Wednesday. It was tagged at wholesale price of 210,480 rials at the regulated forex market in Tehran -- 7.12% or 14,970 rials lower than the previous session.
The regulated market is a network of banks and certified moneychangers under CBI auspices and deals in wholesale currency.
The Euro was worth 268,440 rials down 2.55% or 6,840 rials overnight while the UK pound sterling closed 2.86% lower to fetch 301,000 rials.
The biggest daily loss was in the UAE dirham. It was quoted at 60,000 rials on Monday, posting more than 9% decline compared to Sunday.
The declining pattern of prices is spurred by a combination of factors that are expected to boost the national currency struggling to make a comeback under dire conditions that have inflicted pain for too long.
Hopes of easing US economic sanctions by the incoming Biden administration and the possibility of unfreezing of Iran's forex assets overseas are key factors that have boosted investors’ confidence in the rising rial.
Observers say developments in Iran’s financial markets indicate decline in inflation expectations that were fueled after the victory of Joe Biden, the US president-elect was certified.
Experts are cautiously optimistic about the easing of the US economic blockade in the coming months with a new leader in the troubled Trump White House. The Democrat president has pledged to return to the landmark Iran nuclear deal abandoned by his predecessor in 2018.
Gold Losses Mount
Gold extended losses on Monday impacted by the declining forex rates and indifferent to soaring prices in international markets.
Emami gold coin was traded at 97 million rials declining 5 million rials or 5.16% compared to the previous session. Half Bahar Azadi coin was down 2 million rials to reach 53.5 million rials, 3.75% lower than the previous session. One gram of 18-karat gold fetched 9.2 million rials and dropped 8.6% compared to the earlier session.
However, in international gold markets prices edged higher Monday on the prospect of extended US fiscal stimulus and accommodative monetary policies, although the bullion held close to the 1-1/2 month low hit earlier as the dollar extended gains, Reuters reported.
Spot gold was up 0.3% to $1,831.49 per ounce falling to $1,809.90, its lowest since Dec. 2. US gold futures were flat at $1,829.80.
