The Central Bank of Iran says it is committed to boost the supply side in the currency market.
After crossing the record high a session before, forex rates notched another gain on Sunday prompting the CBI to find urgent ways to control the damage.
The US dollar went as high as 333,000 rials in the middle of session in Tehran’s unofficial market before retreating slightly, closing at 332,000 rials, up more than 1.3% or 4,500 rials on Saturday’s close.
The greenback has gained more than 9% over the past month, triggered in part by rising inflation expectations among the public after the government ended allocating highly subsidized foreign currency for basic imports.
The CBI Governor Ali Salehabadi met managers of exchange bureaus on Sunday to coordinate plans to try and calm the chaotic currency market.
“We agreed to increase supply forex banknotes in the market. The market should see positive developments with this move,” the senior banker was quoted as saying by the CBI website.
“The central bank is prepared to meet forex needs,” he added, noting that the CBI has enough reserves of currency banknotes.
Salehabadi reiterated that the CBI has no problem in paying for imports, saying that currency income from exports outweigh the need for imports.
“An estimated $8.2 billion was traded in the Nima market since the beginning of the fiscal year [March 21] up until June 10,” he said, noting that this was $4.6 billion in the same period last year.
Nima is an online platform affiliated to the CBI through which exporters sell their overseas currency income and companies buy for importing machinery, equipment and raw material.
In this system, importers declare their currency needs, exporters register their overseas proceeds and banks and authorized moneychangers function as brokers.
Other major currencies also surged on Sunday. The euro gained 0.8% or 2,800 rials to reach 351,400 rials. The GBP was up 0.82% or 3,400 rials to be traded at 416,200 rials and the UAE dirham rose 1% or 900 rials to reach an all-time high of 90,700 rials.
In the regulated forex market, where currencies are traded wholesale, the greenback was worth 269,100 rials -- up 0.85% from the session before.
The market is a CBI-affiliated spot market operated by a network of banks and certified moneychangers dealing in wholesale currency.
Rates in exchange bureaus affiliated to the CBI dropped on Sunday. The Melli Exchange quoted the dollar at 270,070 rials, gaining by 0.88% on Saturday.
Prices in the domestic bullion market rose to record levels on Sunday. The popular Emami gold coin crossed the historic level of 160 million rials seen 20 months ago. The coin ended trade at 163.71 million rials, gaining 3.8% or 62.1 million rials in one day.
Half Bahar Azadi coin gained a whopping 8.4% or 7.8% million rials to reach 93 million rials and one gram of 18-karat gold was sold at 15.11 million rials, down 1.87% on the earlier session.
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