EghtesadOnline: Currency rates experienced sharp swings on Sunday, with major currencies soaring again to new highs at the start of the trading session before retreating later.
The US dollar advanced to 260,000 rials in the middle of trade but paused near the resistance level as risks increased following consecutive rallies and investors took the sell side to save earlier gains. The currency has gained 16% in seven consecutive sessions.
It went as high as 259,000 rials on Sunday in Tehran’s open market before retreating to 252,000 rials.
The dollar pulled back further to 248,000 rials in the closing hours as sell-side pressure mounted. One euro bought 284,000 rials, down 1,000 rials, and the UK pound sterling rose slightly to 312,000 rials.
Despite the fast-mode deprecation of the national currency, the Central Bank of Iran has preferred to remain largely passive. There has been no noticeable response either by its officials or its affiliated exchange bureaus as day after day the power of foreign currencies rises negatively impacting lives and livelihoods, manufacturers and traders.
CBI-affiliated moneychangers refrained from changing currency rates for three sessions in a row with the dollar at 230,000 rials.
With prices in the open market heading upward and CBI moneychangers staying put, the dollar price difference reached more than 27,000 rials during the session, tempting buyers to rush to the latter.
The late-hour decline in major currencies may be linked to the CBI’s ultimatum warning exporters to repatriate their currency earnings by July 21 or face legal consequences.
Perturbed by the rapidly approaching deadline, investors in the currency market tilted to the sell side in anticipation of huge currency sales by exporters.
President Hassan Rouhani on Friday instructed the CBI governor Abdolnasser Hemmati to implement rules regarding the repatriation of export earnings.
The dilemma of bringing back export earnings has gained added relevance after turmoil in the forex market was blamed on forex shortages in the secondary market known as Nima.
Nima is trading platform where non-oil exporters sell their proceeds and importers buy them for their import need. The rates at Nima are lower than free market rates.
Nima rates climbed on Sunday with the USD moving toward 16,287 rials, up 8.8%, to reach 200,737 rials, according to the Tehran Gold and Jewelry Union.
Steep increase at Nima rates could be interpreted as the regulators’ attempt to appease exporters over the compulsion to sell their earnings at rates lower than the free market.
The CBI has said it will expose the names of defaulters through the media.
CBI officials say export companies have not returned almost $27.5 billion of their overseas revenue in the past two years.
Gold Slightly Up
Following in the footsteps of the currency market, gold prices pushed higher on Sunday but did not adjust downwards in the follow-up to a later downturn in currency rates.
Emami Gold Coin gained close to 0.4%, or 400,000 rials, to be sold at 112.2 million rials. Bahar Azadi gold coin changed hands for 109 million rials, up 3.6% compared to Saturday’s close. One gram of 18-karat gold fetched 10.74 million rials, up 1.4%.