EghtesadOnline: Major currencies started trading week on a positive note after recording a brief drop on Thursday.
The US dollar fetched 172,000 rials in Tehran’s open market on Saturday, registering 1.68% increase compared to Thursday's close of 169,100 rials. The greenback dropped 1.19% on Thursday after recording successive increases in the past three weeks.
Bank-affiliated moneychangers, however, priced it at 167,000 rials, signaling the Central Bank of Iran's interest in lower rates.
The Emirati dirham, a key factor on exchange rates in Tehran, also registered 2.2% increase on Saturday, with its price reaching 47,550 rials, according to Eghtesad News website. It recorded 1.83% decline on Thursday.
Due to strong trade ties with Iran, Dubai is traditionally seen as a hub of currency transactions with Iran. Any change in dirham rates usually affects other major currencies traded in Iran.
It is said that the exchange rate of dirham to the rial in the Dubai market determines the dollar rate for the next trading day in Iran.
The dollar passed over 170,000 rials in Tehran on Tuesday, hitting a 20-month high. The currency registered 3.7% growth in the past week alone.
In a response to the steep rise in currency rates, Central Bank of Iran Governor Abdolnasser Hemmati said in a note on his Instagram account that putting money in foreign currencies is risky.
"Despite restrictions caused by Covid-19, exporters managed to inject $2.5 billion into the secondary market in the past 50 days…Our observation is 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 that so far have not been worth the paper they are written on.
Emami Gold Coin prices reached 72 million rials on Saturday, up 3.3% compared with Thursday's close. The precious metal experienced a drop on Thursday after hitting an all-time high Tuesday.
Gold prices in Iran are usually influenced more by the domestic forex market and less by the trends in global markets. Both factors affected the prices on Saturday, said Mohammad Kashti-aray, adding that the increasing trend in gold coin prices is likely to continue.
"Growth in the dollar rate on Saturday, naturally boosted the demand for gold coins," he told EcoIran Web Television on Saturday.
International gold prices jumped more than 1% on Friday to levels last seen in 2012, as renewed US-China trade tensions added to concerns about a deep economic slump due to the pandemic.
The fact that gold coins are traded at considerably higher rates in stock exchange seems to be the main cause of the increase in prices in Tehran’s open market. The difference between two rates has reached 5 million rials in recent days.
Experts believe that the difference in gold coin prices in the open market and the stock market is mainly the result of the CBI's reluctance to increase supply. They say that the CBI could boost the supply side to reduce the bubble in the chaotic gold market.
Moreover, online trade in the stock market has provided investors the opportunity to trade from home, which could also be a reason behind the higher gold coin prices in the bourse.