In the wake of the recent rally of US dollar in Tehran’s market, Iran’s former representative at the International Monetary Fund has enumerated three factors for the surge.
According to Mohammad Aqa-Qavam, the seasonal increase of foreign exchange demand [as more Iranians travel abroad in the summer], political events and the inflation rate have played a role in the greenback’s recent rally, Banker.ir reported.
Iran’s former representative at IMF did not elaborate on the political events.
“There are two groups that determine the foreign exchange rates in the market. The first group consists of policymakers, mainly at the Central Bank of Iran, while the other group consists of moneychangers and other players in the foreign exchange market,” he said.
He noted that moneychangers believe stability in the forex market is more important than the rates themselves, because large fluctuations in forex rates lead to speculative activities.
“It seems like CBI is trying to control the inflation rate via foreign exchange rates so the policymaking bank might hold the USD rate around 38,000 rials on purpose,” he added.
Aqa-Qavam believes that CBI would not let the US dollar speed up its upward trend.
US dollar, the most widely traded currency in Tehran’s foreign exchange market, started its rally on July 24 when it was traded for 37,720 rials and gained 500 rials in a week to reach 38,190 rials on Thursday in Tehran’s market, which is the greenback’s highest value in Iran since the beginning of the new Iranian year on March 21.
Add new comment
Read our comment policy before posting your viewpoints