Greenback at Four-Year High
The US dollar was sold for 39,500 rials in Tehran market on Sunday to mark a 2.4% growth compared with the previous day’s close of 38,600 rials.
Reports suggest some moneychangers had sold the currency for as high as 39,800 rials. The currency, however, lost some ground and closed at 39,100 in late trade.
The greenback had begun a surprise rally from 37,500 about 10 days ago, reaching its highest rate in at least four years. However, it lost some ground on Saturday by reaching 38,600 rials, following the statement of the Central Bank of Iran’s governor that the swings are short-lived.
Sunday's rate for the American currency was unprecedented during the tenure of President Hassan Rouhani who took office in mid-2013.
The jump in rates initially was triggered after Donald Trump’s unexpected victory in the US presidential election last month. However, the US Senate’s vote for extending Iran Sanctions Act on Friday is said to have impacted the market on Sunday.
The CBI and the government have also been accused of increasing forex rates, mainly to compensate for the budget deficit, which claims have been strongly rejected by both.
The government handed next year’s annual budget bill to the parliament on Sunday, in which the rate for the US dollar is set at 33,000 rials. The official exchange rate for dollar was set at 32,087 rials, unchanged compared with the previous day’s close.
Elaborating on reasons behind the currency market fluctuations, Kourosh Parvizian, CEO of Parsian Bank and the head of the Association of Private Banks, said the dollar's bull run was mainly caused by growth in demand for the currency “like for travelling to Iraq earlier this month [to attend religious ceremonies there]”.
Parvizian also criticized experts and economists for making unrealistic comments about the market, “especially those who exert influence on the market”.
“Policymakers and experts should be more cautious about what they say, since they might disrupt the forex market,” he said.
The banker added that policymakers could regulate the rates by reforming the regulations. He provided no more details.
Euro was traded at 41,900 rials on Sunday, up by 300 rials compared with Saturday’s close. The British pound exchanged hands at 49,400 rials up from the previous day’s 48,450 rials.