EghtesadOnline: The Central Bank of Iran expects gold coin prices to approach their real levels in the next few weeks, the director of CBI’s Office for Banknote Issuance said.
“As presold gold coins gradually and proportionately enter the market, they are expected to control prices by creating a balance between supply and demand, in addition to meeting the needs of the people,” Masoud Rahimi was also quoted as saying by CBI’s website.
The first presold gold coins will hit the market in the coming weeks, as CBI recently commenced a new wave of gold coin presales that at its earliest, offered coins with a one-month maturity period at 15.9 million rials ($378).
When the government abruptly unified Iran’s dual foreign exchange rate regime of official and open market rates on April 10 to counter rial’s depreciation and announced that each dollar will henceforth be offered at 42,000 rials, gold coin prices were expected to experience a steep drop as the greenback rate also impact them, according to Financial Tribune.
During the first day, the benchmark Bahar Azadi gold coin lost more than 11% of its value and while it was traded for an all-time high of nearly 20 million rials ($477) on April 10, its price dropped to around 17.8 million rials ($423) on April 11.
However, the benchmark gold coin has not only not lost more value since then, but has slightly gained and was traded for 18.38 million rials ($437) on Saturday, according to the Tehran Gold and Jewelry Union.
After taking into account the current unified USD rate and the price of each ounce of gold in the global market, each benchmark gold coin will be priced around 13.5 million rials ($321) and about 14.5 million rials ($345) after adding the 9% value-added tax and the cost of minting the coin.
Presold coins with one-month maturity periods represented an expansion of CBI’s scheme, but the presales of one-month coins were halted from April 18.
According to Rahimi, the halt was due to limitations in minting the coins.
“One of the important issues in the presale of coins is planning for the production of presold coins with different maturity periods,” he said.
“Considering the prominence of CBI coins and people’s trust in them, maintaining the quality of work in terms of the exact carat, high purity and minting quality on the one hand and adhering to commitments on the other were the main concern and redline for CBI.”
Rahimi noted that since the one-month coins were well received and “the production line of coins faced limitations”, the one-month presale was halted.