The official exchange rate touched a new frontier on Thursday in yet another indication that the Central Bank of Iran is seriously looking into unifying currency rates.
The greenback was traded at 36,350 rials on the open market on Thursday while the official rate crossed the 30,000 milestone to buy 30,027 rials for the first time since President Rouhani took office in the summer of 2013.
A few months ago the official exchange rate started its rally surpassing 28,500 rials set in the Budget Law 2015-16. The bull run gained further momentum as the market exchange rate registered record growth in recent weeks, eventually pushing the official rate over 30,000 rials.
Pouya Jabal-Ameli, an analyst with the Financial Tribune believes the increase in official exchange rate is a positive sign indicating that the CBI has finally made decided to close the gap between the two rates by pushing the official rate closer to the market rates – a break from the bank's usual strategy of doing the other way round.
The analyst assessed the recent announcement by the government spokesman Mohammad Baqer Nowbakht to the effect that forex rates will remain the same in next year’s budget bill (2016-17) with the USD at 28,500 rials as "a personal opinion," noting that "The exchange rate envisioned in the budget bill does not reflect the real rate and that the government sells foreign currency to the CBI at the official rate for that day."
He stressed that the forex rates in the budget law does not serve as a basis for decisions made by businesses and dismissed reports that the announcement by government is a sign that it seeks to support local production and supply of raw materials by offering cheap hard currency. "To do so, the government should support higher foreign exchange rates to be able to make domestic manufactures competitive in global markets." he argued.
Jabal-Ameli predicated the USD rate to be set at over 30,000 rials in next year's budget bill.
>> Gold Coin Rally
As the greenback's exchange rate surpassed 36,000 rials in the market and global gold prices surged, Azadi gold coin for future delivery rose in the Iran Mercantile Exchange on Thursday.
The benchmark coin was sold at 9.1 million rails. For delivery in March, April and June, the gold coin was respectively sold at 9.1, 9.1 and 9.2 million rials.
Analysts believe that the slight but regular fluctuations in global markets have indeed spiced up the gold coin futures.
Caption: Greenback's official rate has become very close to the market's rate.
