Rial Strengthens as Forex and Gold Slip

Foreign exchange rates pared more of their previous gains on Monday dragging down gold prices in the domestic market.
The dollar retreated further toward 270,000 rials in Tehran’s open market, losing another 2.2% or 5,860 rials. The greenback went as high 282,000 rials in the beginning of trading week on Saturday. It gained close to 12% in one month.
Following in the same path, the euro took a bigger drubbing and lost 3.6% or 11,150 rials to fetch 305,880 rials and the UK pound sterling shed 2.25% or 8,420 rials to reach 374,310 rials. The UAE dirham was quoted at 73,610 rials, down 2.15% or 1,580 rials.
Prices in the official exchange bureaus affiliated to the Central Bank of Iran also declined where the dollar dropped below the 260,000-rial level and was quoted at 258,370 rials, 3.9% or 10,000 rials lower compared to Sunday.
In the regulated forex market the dollar was worth 264,050 rials, more than 2.1% lower compared to the previous session. This market is a network of banks and certified moneychangers working under CBI supervision dealing in wholesale currency.

Forex rates began to lose value on Sunday spurred by fears that the CBI, as in the past several years, could intervene to curb the high and rising rates.
Caution returned to the currency market after President Ebrahim Raisi on Sunday expressed concern about rising forex rates and warned against its inflationary impact.
Addressing the government's economic coordination headquarters, he tasked the team with “taking quick and effective measures to control the rise in forex rates and inflation.”
Prices dipped further in the domestic bullion market impacted by the pulse in the currency market. Jewelers tagged one Emami gold coin at 118.62 million rials on Monday, down 1.1% or 1.3 million compared to Sunday.
Half Bahar Azadi coin lost 1.6% to buy 62 million rials and one gram of 18-karat gold was worth 11.65 million rials, down 1.4% daily, according to Tehran Gold and Jewelry website.  
In international markets gold prices edged lower as risk appetite got a boost after US Federal Reserve chief Jerome Powell assuaged market fears of a quick withdrawal of pandemic-era stimulus, dampening bullion’s safe-haven appeal, Reuters reported.
Spot gold was down 0.2% at $1,813.76 per ounce. Earlier in the session, bullion scaled to its highest since Aug. 4 at $1,822.92 while US gold futures edged 0.2% lower to $1,816.50.