Economy, Business And Markets

US Dollar Crosses Major Threshold

US Dollar Crosses Major ThresholdUS Dollar Crosses Major Threshold

The US dollar was sold for 36,000 rials in Tehran on Wednesday, marking the highest rate since the start of the current fiscal year in March. The currency had started a modest rally up from last week , reaching  35,670 on Saturday.  

The Central Bank of Iran fixed the official US dollar rate at 31,517 rials on Wednesday which was down by 0.01% compared with the previous close.

The official rate recorded a 2.36% growth during the past six months.  The central bank has been increasing the official exchange rate of foreign currencies, in accordance with its plans to unify foreign exchange rates. 

On Wednesday the euro exchanged hands at 40,060 rials in the markets, marking 0.5% growth compared with yesterday’s close. The British pound, however, experienced fell 0.32% and bought 46,300 rials.  

The government is planning to unify the forex rates by the end of the current fiscal year (ending in March 2017). A single forex rate regime is expected to help Iran reintegrate with global economy at a faster pace.

Masoud Nili, President Hassan Rouhani’s economic advisor said on Tuesday the national budget for 2017-18 will be prepared based on a single currencyrate.

The private sector has long begged for the implementation of the plan, as it believes the move would minimize speculative activities in the markets and curb rent-seeking and corruption.

So far the CBI has taken some key measures for reaching the goal, increasing the official exchange rates, promoting stability in forex market and allowing banks to trade foreign currency at market rates.  However, currency traders say the CBI and the government should provide more details about their plans, especially about the mechanism and process of setting the rates.

Iran was forced to revert to the controversial double exchange rate regime after nuclear-related sanctions unleashed turmoil in the forex market in 2011-12 in which the national currency lost almost 70% of its value within days.

 Gold Coin Prices Down

Unlike the greenback, the price of gold coin dropped significantly on Wednesday.

According to the Tehran Gold and Jewelry Union, Azadi gold coin was traded at 10.890 million rials, down by 1.3% or 140,000 rials compared with previous day’s close.

The Half Bahar Azadi gold coin experienced 3.08% drop compared with the previous day’s close and was sold at 5.52 million rials on Wednesday.

In global markets gold slid more than 3 % on Tuesday to its lowest since Britain’s shock vote to leave the European Union in June, as a bounce in the dollar after upbeat US data triggered a break of key support at $1,300 an ounce.

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