EghtesadOnline: The US dollar crossed another psychological threshold in Tehran on Monday with price pressures increasing as the end of the Iranian fiscal year approaches in March.
The greenback sold for 130,000 rials in mid-day trading, up from 125,000 rials on Sunday and 122,000 rials at the beginning of the week. Gold prices also continued the upward trend on Monday with the benchmark Bahar Azadi gold coin fetching 44.3 million rials ($341).
Mohammad Kashtiaray, president of the specialized gold and jewelry commission at Iran Chamber of Guild said the main reason behind higher gold prices was the increase in foreign currency rates.
"Contrary to the trend in the past week where demand had increased, in the past three days supply and demand was balanced and global prices also were stable," Kashtiaray told the Financial Tribune in a phone interview.
"Therefore the key factor for the gold price hike is the increase in forex rates."
According to Kashtiaray, since demand relatively stable for now, the gold coin bubble (domestic price compared to international prices) has become smaller from the 5.8 million rials last week to 4.2 million rials now.
As for the jump in forex rates, Kashtiaray attributed the volatility to rising demand for hard currency in the final months of the year and currency allocation restrictions by the Central Bank of Iran.
The CBI said Monday that since August 2018, close to $10 billion in hard currency from the CBI, petrochemical companies, steel companies, and the National Iranian Gas Company has been offered on the forex platform Nima. The bank said the figure for non-oil exports have been over €1 billion during the same time.
It added that this figure does not include the currency sold by exporters in the free market to exchange bureaux or the forex allocated for the exporters’ own import needs.