Iran: USD at 20-Month High, Gold Up
EghtesadOnline: Price of the US dollar passed over 170,000 rials in Tehran on Tuesday, hitting a 20-month high. Emami gold coin also recorded an all-time high on Tuesday climbing to an unseen 70.087 million rials.
The dollar and other major currencies have been rising since Saturday, when bank-affiliated exchange shops suddenly increased rates coming closer to those in the free market.
Euro was priced at 180,000 rials on Tuesday, according to Tehran Gold and Jewelry Union's website. The UAE dirham, one of the most influential elements influencing the dollar in Tehran, recorded 1% growth to reach 47,000 rials.
The Swiss Franc registered the largest increase on Tuesday -- 2.3% according to TGJU.
Experts say the increase in returns in parallel markets ( stocks, gold and housing) has drawn more investors to the chaotic currency market.
However, in an interview with IRNA, Kamran Soltanizadeh, head of the Iranian Association of Exchange Shops, warned policymakers against focusing on controlling forex rates, saying "Effective policies are needed to control all factors impacting markets."
He singled out the auto market as one that is now having a strong impact on forex rates in Iran
In a response to the steep rise in currency rates, Central Bank of Iran Governor Abdolnasser Hemmati in a note on his Instagram account said putting money in foreign currencies is risky.
"Despite restrictions caused by the outbreak of Covid-19, exporters managed to inject $2.5 billion into the secondary market in the past 50 days…Our observation indicates that the market is going to return to its previous state as trade channels reopen," he wrote.
He did not elaborate, but it seems the CBI boss was referring to the long-delayed trade channels with the Europeans.
Gold coin also hit new records in Tehran. Each Emami coin was traded at 70.64 million rials on Tuesday, the Tehran Gold and Jewelry Union reported, up 670,000 rials or 1% compared to previous day.
Gold prices in Iran are usually influenced more by the domestic forex market and less by the global gold market. Thus, the domestic gold market is relatively indifferent to the surge in prices of the precious metal in international markets -- where too gold prices are rising as the coronavirus continues to hammer economies not seen in more than a century.
However, the fact that gold coins are traded at considerably higher rates at stock exchange seems to be the main cause of the increase in prices at open market. The difference between two rates has reached 5 million rials in recent days.