Bucking a declining trend that started on Saturday, foreign exchange rates reversed course on Wednesday gaining against the national currency.
The dollar scaled back above 240,000 rials for day to close at 240.400 rials, gaining 1.2%. The American currency was quoted at 242,000 rials during the day in Tehran's free market.
Exchange rates have been relatively stable in the past few months and market participants have traded cautiously.
The greenback had declined to nearly a 3-month low on Tuesday posting losses for the second successive month. It lost 4% in the month to March 19 and 5.3% ending April 20.
Other major currencies also rallied Wednesday. The euro was up 1.12% to fetch 289,890 rials and UK pound sterling gained 3,900 rials or 1.16% to buy 335,960 rials. The UAE dirham gained less and was worth 66,710 rials.
Despite the rise in open market rates, currencies were largely unchanged in the official exchange shops operated by banks. The dollar was worth 233,750 rials at Melli Exchange.
Exchange rates have become highly sensitive to reports on the talks in Vienna between Iran and five countries signatories to the nuclear deal to bring Iran and the US back into the agreement.
The deal officially known as the Joint Comprehensive Plan of Action (JCPOA) was abandoned in 2018 by the former US president Donald Trump, who reimposed new economic sanctions against Iran. In response, Iran scaled back its nuclear commitments envisioned in the accord.
However, it seems the rise in currency prices on Wednesday was buoyed by reports that reaching a deal may take much longer than expected.
According to the Persian-language economic news website Eghtesad News, traders on Tuesday quoted higher rates for forward deals in response to reports that reviving the nuclear takes could time.
The United States and European Union said Tuesday that more work was needed to revive a 2015 agreement on Iran's nuclear program, although Tehran reported progress after the latest diplomacy, news outlets reported.
EU diplomat Enrique Mora hailed "progress made over the last two weeks" but said "ongoing challenges" remained to put the accord back on track.
Gold Rebounds
Price in the gold market surged on Wednesday visibly impacted by the rally in the currency market. The rally was further boosted by an upbeat mode in international markets.
The Emami gold coin climbed 1.6% to 102.4 million rials, gaining 1.6 million rials compared to the earlier session. Price of the half Bahar Azadi gold coin was unchanged.
Gold prices were hit by low exchange rates as well as a decline in demand for the precious metal as the domestic gold market is closed since April 10 due to Covid-19 lockdown.
In international markets, gold prices rose on Wednesday, supported by falling US Treasury yields and sagging global stocks as surging coronavirus cases revived fears about the global economy. Spot gold climbed 0.5% to $1,786.06 per ounce while US gold futures gained 0.5% to $1,788 per ounce.
