The foreign exchange market in Tehran was in turmoil on Saturday amid investors' pessimism over the prospect of another burst in prices, namely currency prices, after the implementation of gasoline rationing scheme announced and implemented in Thursday midnight.
The US dollar on Saturday climbed above the psychological level of 120,000 rials in Tehran’s open market and was traded for 122,000 rials for a time during the day.
It later retreated to 120,000 rials apparently amid heavy intervention by the Central Bank of Iran in the market through its affiliated moneychangers.
The rate is up about 2.5% compared to 116,500 rials quoted for Thursday, and more than 5% higher compared with last week’s prices.
One euro was sold for more than 131,000 rials and the pound sterling fetched 154,500 rials on Saturday.
Rates at the CBI-affiliated moneychangers were slightly lower. The USD was sold for 119,050 rials in bank-based exchange bureaus, up 3.5%, according to data seen on the Tehran Gold and Jewelry Union website.
Although prices had begun rising since the Saturday a week ago, it picked pace soon after the controversial gasoline rationing scheme was announced before the sun rose on Friday.
The greenback was traded at or near 113,000 rials for more than 70 days before climbing steadily since last week.
Bank-based moneychangers intervene in the market whenever the currency market fluctuates. Their intervention mainly involves balancing supply and demand using adjusted prices, and pushing for disciplinary action to curb harmful speculative activities.
The National Iranian Oil Products Distribution Company (NIOPDC) said late Thursday that gasoline had been rationed and prices raised between 50% to 200%.
Private car owners can buy 60 liters of subsidized gasoline every month with a fuel card at 15,000 rials (13 cents) a liter, up 50%. Additional purchases (maximum 250 liters a month) will cost 30,000 rials (26 cents) per liter, up 200%.
Gold Rises
Taking influence from the currency market, gold prices also climbed with the Emami gold coin rising more than 3.8% on Saturday.
Each Emami coin was traded for 42.1 million, up about 1.5 million rials compared with Saturday’s close, according to the TGJU website.
The benchmark Bahar Azadi gold coin was worth 41.09 million rials, rising from 40.39 million rials on Thursday.
Gold prices in the domestic market take influence more from the local forex market than the international gold market and many global markets were closed for the Saturday weekend.
Spot gold declined 0.24% to $1,467.44 per ounce Friday but was set to rise more than 0.6% this week, Reuters said. US gold futures were down 0.4% at $1,468.20 an ounce.
