EghtesadOnline: Forex rates posted heavy losses on the first day of trading week in Tehran on Saturday with major currencies sliding below support levels.
The US dollar fell below 250,000-rial level losing more than 3% in the open market and closed at 247,000 rials, down 8,000 rials compared to Thursday's close.
Vacillating near 260,000 rials, the dollar hardly fell below 250,000 rials for weeks. The UAE dirham was the second biggest loser of the day. It too lost the critical support level of 70,000 rials and dropped 2.74% or 1,900 rials to reach 69,400 rials.
Smaller losses were recorded for euro and the UK pound sterling. The former lost 2,000 rials to reach 310,230 rials down 0.65% while the pound fetched 344,475 rials 0.61% lower compared to Thursday.
The greenback was down also in official exchange shops affiliated to banks. Melli exchange, affiliated to the Bank Mell Iran, tagged the dollar at 248,750 rials down 2.75%, or 6,840 rials, compared to the earlier session.
Already impacted by lower international markets, gold fell further in Iranian markets due to the decline in domestic forex rates.
The Emami gold coin lost 6.82% or 7.5 million rials Saturday to reach 110 million rials. It has lost more than 10 million rials in the past three sessions.
Half Bahar Azadi coin was down by 4.8 million rials to reach 58 million rials – a whopping 8.28% decline overnight. One gram of 18-karat gold was worth 10.96 million rials posting 5.5% decline in one session, the Tehran Gold and Jewelry Union reported.
While forex rates were stable, the domestic gold market has been harmed by the decline in precious metal prices in overseas markets.
According to Reuters, gold slumped more than 4% on Friday. Spot gold fell as low as $1,828.36 and was last down 3.6% at $1,843.06 per ounce, en route to register its worst week since November.
Observers opine that the new developments in gold and currency market indicates decline in inflation expectations that were fueled in recent weeks after Donald Trump, the bellicose president of the United States who was unseated in the Nov. 3 elections.
Experts are cautiously optimistic about the easing of US sanctions in the coming months under the leadership of incoming president, Joe Biden. He has pledged to return to the landmark nuclear deal abandoned by his predecessor in 2018.
On Thursday, the Governor of Central Bank of Iran Abdolnasser Hemmati expressed hope that stability in financial markets would be restored in the coming weeks as "excitement arising from political developments ebbs".
In a note posted on his social media account Hemmati said hopes also have arisen from the probable "increase in crude oil and petroleum exports" and promising reports about unlocking CBI assets overseas.
Highlight: Vacillating near 260,000 rials, the dollar hardly fell below 250,000 rials for weeks. The UAE dirham was the second biggest loser of the day. It too lost the critical support level of 70,000 rials and dropped 2.74% or 1,900 rials to reach 69,400 rials