The ascending order of forex rates in Tehran continued on Tuesday with the dollar moving above 260,000 rials in the open market.
The greenback climbed more than 1.7% or 4,400 rials and was quoted at 261,900 rials -- the highest since the beginning of the current fiscal year in March.
Observers say if the American currency stays above the 260,000- rial level it could advance to the all-time high of 320,000 rials logged in October 2020.
Likewise, the euro gained 1% or 3, 070 rials to change hands at 306,190 rials and the UK pound sterling was up 1.07% or 3,900 rials to reach 361,690 rials. The UAE dirham was quoted at 71,050 rials, up 0.2% or 150 rials compared to Monday.
Spurred by rising inflation expectation due to the gaping holes in the budget, the already chaotic currency market has also been affected by external factors, namely the deepening political crises in Afghanistan and the Taliban offensive nearing Iran's borders.
Add to this the diminishing hope for the revival of Iran’s nuclear deal with the Vienna talks with world powers stalled since last month, the Persian-language economic news website Eqtesad News said.
Currency market speculators apparently are looking closely at an analysis by Bloomberg on Monday, in which the major news outlet said US President Joe Biden and his administration face the reality that returning to the Iran nuclear deal, known officially as Joint Comprehensive Plan of Action (JCPOA), may no longer be feasible, as Iran finds ways to bypass the US economic blockade in place since 2018.
Sentiment in the forex is also impacted by speculation about change of guard in the Central Bank of Iran in the coming days as the new President Ebrahim Raisi appoints his Cabinet members.
The transition process is seen as undermining the CBI’s leverage to intervene in the currency market as in the past. Official exchange bureaus affiliated to the CBI tagged he dollar at 251,480 rials, 1.2% or 3,000 rials higher compared to the earlier session.
In the wholesale regulated currency market the dollar was worth 252,560 rials up 0.8% or 1,950 rials rise over prices quoted on Monday.
The regulated market is a network of banks and certified moneychangers working under CBI auspices and deals in wholesale trade.
Gold Prices Struggle
The domestic bullion market lagged behind as the effect of the sharp decline at global gold prices outweighed the impact of the rising currency prices.
While higher forex rates normally carry gold prices in Iran, gold was either unchanged or saw slight gains.
The popular Emami gold closed Tuesday at 112. 9 million rials, down 0.05% or 50,000 rials. Half Bahar Azadi coin increased 0.5% to reach 58 million rials and one gram of 18-karat gold bought 110.92 million rials, up 0.75%.
In the international market the yellow metal steadied on Tuesday after three straight sessions of decline as uncertainty from the worsening coronavirus countered a buoyant dollar and bets for early tapering of the US Federal Reserve’s economic support, Reuters said.
Spot gold was little changed at $1,729.38 per ounce while US gold futures stood at $1,731.50.
