Dollar Rallies to 38,600 Rials

The US dollar swelled yet again in Tehran’s foreign exchange market on Saturday, reversing its fall on Thursday.

The greenback started off at 38,000 rials at the market’s opening on Saturday morning and immediately embarked on a rising trajectory that eventually made it land on 38,600 rials in late trade. 

That is while on Thursday, it had broken the 39,000 ceiling and was traded for 39,400 in what was the highest price the greenback had registered duringthe tenure of President Hassan Rouhani who took office in 2013.

Spurred by the preparations for the annual Arbaeen pilgrimage to neighboring Iraq, it had begun its upward journey last month and began its rally moving beyond 360,000 rials. 

On the first day in Tehran after the US presidential elections, the US dollar sold for 36,580 rials, up from the previous day’s close of 36,400.

But the Central Bank of Iran’s Governor Valiollah Seif has since moved to reassure people and the market that the current fluctuations are nothing but temporary and as some non-experts would have it, the rial will not undergo a crisis similar to what happened during the 2011-12 currency crisis. 

“Considering that economic fundamentals do not support the recent gyrations in the currency market, the nature of these swings is not telling of lasting effects,” Seif wrote in his official channel in the Telegram instant messaging app.

Another factor that, according to pundits, will soon move to tame currency prices in the Iranian market is OPEC’s latest deal. The 14-member oil organization agreed to reduce production by about 4.5 % or about 1.2 million barrels to a ceiling of 32.5 million a day. 

However, as a special case, Iran has been allowed to further raise production, which would mean more hard currency for the country.