Currency and gold prices rallied on Saturday in Tehran after official markets were closed for two days due to religious holidays.
The dollar briefly rebounded to 230,000 rials before retreating slightly in the late hours to close at 229,000 rials, positing more than 2.5% gain.
Iran’s forex market has seen more volatility in the past two weeks. The American currency declined sharply in the week ending May 7, plunging to as low as 215,000 rials and losing more than 6% in one week.
The greenback began to climb in the middle of last week and pared close to 5% of earlier losses. The declining trend was buoyed by progress in the ongoing negotiations in Vienna between Iran and signatories of the historic 2015 nuclear deal aimed at reviving the accord that was abandoned by former US president Donald Trump in 2018.
However, with the marathon talks getting more difficult than currency market investors in Iran had anticipated and uncertainty about outcome, market trends reversed in the past few days.
Some observers say currency speculators are keeping a close eye the upcoming presidential election in Iran and studying the candidates trying to find out what path he will take to calm the near permanent chaotic forex market.
Role of Dirham
The Persian-language economic newspaper Donya-e-Eqtesad said the rising trend is due the rise in UAE dirham hawala, which traditionally impact all other major currencies.
Citing market observers, the newspaper said increase in demand for dirham would be inevitable as the Dubai market is closed for the Eid al-Fitr holidays, which marks the end of the holy month of Ramadan.
The dirham was worth 62,600 rial on Saturday and gained 1.27%. Other currencies also climbed. The euro fetched 279,350 and UK pound sterling 324,300 rials, respectively gaining 2.8% and 2.5% in the free market.
Prices at official exchange shops affiliated to the Central Bank of Iran increased Saturday but were still lower than the free market, creating a price arbitrage of 1,000 rials for the USD.
Melli Exchange, the moneychanger affiliated to the Bank Melli Iran, sold the dollar at 220,500 rials -- 2% or 4,370 rials higher than previous session of trade.
Gold Higher
Boosted by a combination of rising forex rates, increase in demand as markets opened following relaxation of Covid lockdown rules and the upbeat mode in international gold markets, the domestic bullion market was buoyant on Saturday.
Emami gold coin gained 2.6% and clawed back above the critical 100 million rials level on Saturday. The popular coin closed at 102.149 million rials.
Half Bahar Azadi coin fetched 58 million rials and climbed 5.45%, 3 million rials higher than the previous session. One gram of 18-karat gold was sold for 10.23 million rials, up 5.72% compared to Thursday.
Gold extended gains on Friday in the international markets, buoyed by a dip in the dollar and US Treasury yields after data showed US retail sales unexpectedly stalled in April, REutes reported.
Spot gold rose 0.6% to $1,838.05 per ounce, heading for a second week of gains. US gold futures settled 0.8% higher at $1,838.1
