The dollar bucked the declining trend on Wednesday after falling below the psychological support level of 270,000 rials a session before.
Trade under the support level was short-lived as rates spiked in Tehran’s open market and the greenback surged to 271,700 rials, up 0.2% or 500 rials compared to Tuesday
The American currency lost more than 4% of its value in the past two weeks, dropping from 282,000 rials in late September to near 270,000 rials early in the week.
The pattern was driven mainly by declining expectations on the heels of the appointment of a new governor at the Central Bank of Iran. Ali Salehabadi took the helm replacing Akbar Komijani.
In addition, currency market investors were perturbed by optimism arising from reports on the resumption of international negotiations to restore Iran’s nuclear deal.
On Wednesday the euro gained 0.25% or 740 rials to close at 314,273 rials but the UK pound sterling and UAE dirham lost some ground. The pound was quoted at 368,474 rials down 0.2%. Likewise, the Emirati dirham fetched 74,000 rials losing 0.13%.
Despite increase in demand for currency in the open market, official exchange shops affiliated to the Central Bank of Iran tried to keep the rates in check.
The dollar was tagged at 260,000 rials at the state-owned Melli Exchange on Wednesday, closing 490 rials or 0.2% lower compared to the session before. In the wholesale market, known as regulated forex market, it was down 0.4% to 263,050 rials.
Tehran’s regulated market is a spot market operated by a network of banks and certified moneychangers dealing in wholesale currency. It is supervised by the CBI.
Gold prices surged on Wednesday impacted by the currency spike and bolstered by increase in precious metal prices in international markets.
The popular Emami gold coin hiked 0.5% or 550,000 rials to reach 117.35 million rials. The Half Bahar Azadi coin closed almost unchanged and was traded at 59.73 million rials. One gram of 18-karat gold was worth 11.4 million rials, rising more than 1.2% or 620,000 rials compared to the earlier session, the Tehran Gold and Jewelry Union reported.
Gold rose on Wednesday in international markets boosted by concerns of an economic hit from soaring energy prices and a retreat in the dollar, as investors braced for US inflation data, Reuters reported.
Spot gold rose 0.6% to $1,769.68 per ounce while US gold futures gained 0.7% to $1,770.60.
