The US dollar began a fresh rally on Wednesday in the free market, reaching 37,120 rials, up from the previous day’s close of 36,780 rials. The currency has been gaining against the rial in recent months, raising fears about market volatility similar to the events in 2012 during which the rial lost almost 70% of its value in a few days. The exchange rate for the euro and UAE dirham also increased by 10 rials and 50 rials, reaching 40,080 rials and 10,150 rials, respectively, FNA reported. Ebadollah Mohammadvali, head of Iran’s Association of Gold and Jewelry Manufacturers and Exporters, however says the daily “greenback rally would be short-lived as it is mostly caused by Saudi government’s recent decision to sever diplomatic and economic ties with Iran.” The rupture ensued after angry crowds at the weekend stormed the Saudi Embassy in Tehran, protesting the execution of a prominent Shia cleric by the oil kingdom. Later, Sudan and tiny Bahrain also followed suit by cutting ties to Tehran.
