EghtesadOnline: Selected foreign exchange bureaus affiliated to the Central Bank of Iran pushed up dollar rates above the historic 200,000 rials on Saturday.
This came after price gaps between the CBI moneychangers and the open market reached unprecedented levels, encouraging currency dealers and speculators to line up for cheaper currency.
The so-called bank-based moneychangers increased the dollar price by 19,500 rials to 209,000 rials -- a rarely seen 10.3% hike overnight to eliminate a price arbitrage that reached 17,000 rials.
One euro was worth 232,990 rials at the moneychangers, up 22,000 rials or 10.4% daily, and the UK pound sterling increased slightly to 265,000 rials to post 1.85% growth overnight.
Major currency rates in Tehran’s open market were higher. The greenback changed hands at 211,000 rials, nearly 2% higher than Thursday’s close.
The euro was sold for 239,000 rials, up 8,000 rials compared to the previous session and United Emirate dirham was worth 58,000 rials.
According to Persian-language economic newspaper Donya-e-Eqtesad, increase in dirham rates has fueled expectation about further hike in forex rates given its usual impact on the domestic currency market.
The Emeriti currency is important in determining rates in Tehran because the Persian Gulf Arab state is a traditional hub for Iran’s import and export.
When price differences in the open market and the CBI exchanges increase, the regulator tends to first push up currency rates to bridge the gap and then tends to control the market with lower rates.
At times of steep volatility in the currency market, long queues are seen in front of bank-based moneychangers. Each buyer, however, is allowed to purchase a limited amount of currency via these exchangers.
The CBI imposed a cap on currency trade in summer 2018 to control the near permanent turmoil. Since then, authorized moneychangers are allowed to sell no more than $2,200 to each Iranian in one year.
Gold at All-Time High
Prices in the domestic gold market are also soaring as never before due to the hikes in currency rates and a bullish trend in global markets.
The price of one Emami gold coin went up 5.5% to 99.8 million rials, marking a 5.1-million increase in one day and drawing near the critical 100 million rials, according to data released by the Tehran Gold and Jewelry Union.
The benchmark Bahar Azadi climbed almost 5.6% to 94 million rials and one gram of 18-karat gold fetched 9.07 million rials.
Gold delivered higher gains compared to currency rates last week. Market data indicate gains of 13.5% and 10% respectively for gold and currency during the last trading week.
Gold prices were little changed on Friday in world markets, as worries over an accelerating number of coronavirus cases countered a fillip to risk sentiment from positive US and Chinese economic data, Reuters said.
Spot gold was mostly unchanged at $1,775.06 per ounce.