Currencies rallied in Tehran on Saturday after more than two weeks of stability spurring a rising trend in the domestic bullion market.
Vacillating between 228,000-232,000 rials in the past week, the dollar jumped to 239,500 rials in the free market up 3.2% or 7,600 rials. It briefly crossed the critical 240,000 rials.
The euro rose more than 2.7% or 8,000 rials to close at 292,110 rials and the UK pound sterling gained 11,850 rials or 3.5% to close at 340,280 rials. The lowest gain was for the UAE dirham as it closed at 64,500 rials, up 1% or 600 rials compared to the session earlier.
Unofficial and unconfirmed reports Friday about the removal of the governor of Central Bank of Iran, Abdolnasser Hemmati, spurred expectations among market speculators and increased prices for forward deals.
While the rumor was neither officially confirmed nor rejected, it led to new volatility in the forex market, the Persian-language economic news website Eqtesad News reported.
The website reported on disagreements between President Hassan Rouhani and Hemmati who is running in the presidential elections.
One factor pushing prices upward, most observers say, is that the ongoing Iran nuclear talks has taken much longer than expected.
Iran is negotiating with major powers signatories to the 2015 nuclear deal, known as Comprehensive Joint Plan of Action (JCPOA), in Vienna to revive the accord abandoned by the United States in 2018.
Uncertainty over the outcome of the marathon talks and resistance of forex rates against further decline in the past two weeks has created optimism among middlemen that currency rates could bounce back in the coming weeks.
Analysts say the Vienna talks are indeed a strong and influential factor in the currency market and prices are likely to fall if the diplomatic efforts succeed in reviving the landmark nuclear deal and lifting the US sanctions.
Following the steep increase in the open market, official exchange bureaus affiliated to the CBI also pushed up prices to avoid arbitrage. Melli Exchange tagged the dollar at 234,570 rials, up 8,100 or 3.58% compared to the earlier session.
The greenback was quoted at 231,120 rials in the wholesale currency market known as the regulated forex market. It was 3.3% or 7,640 rials higher compared to Thursday.
The forex rally soon extended to gold prices despite a downturn in international bullion markets.
Emami gold coin gained 3.45% or 3.7 million rials to fetch 106.9 million rials on Saturday and the half Bahar Azadi coin was quoted at 602 million rials up 1.2%.
One gram of 18-karat gold was sold at 10.81 million rials, up 3.35% compared to the session earlier, the Tehran Gold and Jewelry Union website reported.
Gold prices were subdued on Friday in world markets hurt by a firm dollar and higher US Treasury yields, while investors waited for US personal consumption data later in the day, the Fed’s preferred inflation gauge, Reuters reported. Spot gold fell 0.3% to $1,890.90 per ounce for the day and US gold futures slipped 0.2% to $1,891.50.
