EghtesadOnline: Currency rates again pushed upwards on Tuesday, amid heightened political tensions in the region, but the Central Bank of Iran was quick to announce that there is no need for anxiety.
The US dollar reached 138,000-139,000 rials in Tehran free market on Tuesday, slightly higher than Monday's close. It was traded at lower rates in CBI-affiliated exchange shops, Financial Tribune reported.
Likewise, the euro gained 1% on Tuesday and was priced at 149,880 rials, according to Eghtesadnews.com.
Forex rates embarked on the ascending order from Friday, spurred by escalation in political and military tensions in the region and investor pessimism over what holds for the future. The USD was traded below 130,000 rials a day before.
Market analysts say the expectation that the CBI will intervene and control the rates (as it has done in past) prevented further speculation in the market.
Abdolnasser Hemmati, the CBI governor, assured the public about the bank’s supervision over the market, saying that there will be no dramatic jump in rates.
"There is no need to be worried about any shock in currency rates, we have efficient tools [to control the rates]," ILNA quoted him as saying.
Rates at CBI-affiliated moneychangers, which act as the regulatory wing of the CBI in the currency market, have not seen much fluctuation since the start of the week, meaning that the CBI has not yet taken any noticeable measure to control prices. CBI exchange bureaus sold each greenback for 134,000 rials, up about 0.4% compared to the day earlier.
Bank-based moneychangers intervene in the market whenever the currency market fluctuates. Their intervention mainly involves balancing supply and demand and disciplinary action to curb harmful speculative activities.
According to Tehran Gold and Jewelry Union, each Emami gold coin was priced 51.47 million rials, registering a daily growth of 1% or 550,000 rials.
Bahar Azadi gold coin also gained 0.8% or 400,000 rials on Tuesday and was worth 50.37 million rials.
According to TGJU data, the price of Emami gold coin has increased by 28.5% in the past three months. It has also seen 36.7% growth compared with the same day last year.
Even though gold coin prices are expected to hit new highs in Tehran, many experts believe that the increase is natural given the fluctuations in the domestic currency market and the international gold market.
"Rising tensions in the region, the surge in forex rates in domestic markets and increase in gold prices in global markets are key factors impacting gold coin prices," says Mohammad Keshti Aray, head of Iran’s Specialized Gold and Jewelry Commission.
He, however, expected stability in gold coin prices in the coming days, "as tensions in financial markets fade."
On the global front, gold prices jumped to almost seven-year highs on Monday as a spike in geopolitical tensions in the Middle East spurred demand for safe-haven assets, according to Reuters.
Spot gold hit $1,582.59 an ounce, it’s highest since April 2013, but the precious metal later pared some gains. US gold futures settled 1.2% higher at $1,568.80.