EghtesadOnline: Forex rates moved above 260,000 rials on Sunday to extend a rally that has strengthened since the beginning of the previous week.
The dollar made a big leap forward and rose by 5,000 rials, or 2%, to reach 267,000 rials at the close of Sunday’s session. The rial has tanked more than 10% since the new turmoil in the currency market from the beginning of this month.
Similarly, the euro rose 2% to 317,000 rials, the UK pound sterling soared to 342,000 rials, up 5000, and the UAE dirham gained 1.9% climbing to 73,000 rials.
CBI-affiliated exchangers quoted the dollar at 234,420 rials, up 1.23% compared to a day earlier.
As the value of the national currency continues to depreciate with added momentum, economic experts and market observers ascribe the latest instability to investors in increasing numbers moving capital from parallel markets, namely stocks, to the currency market.
A prolonged bearish stock market, plus investors’ disappointment over an imminent recovery have pushed many to buy foreign currency as a safer bet.
Analysts also refer to “rising expectations” among investors arising from intensifying political tensions and tightening US economic sanctions as another potential factor behind the unprecedented upsurge in currency rates.
Earlier in August, the United States secretary of state, Mike Pompeo, claimed the US was pushing for the return of UN sanctions that had been imposed on Tehran before the 2015 landmark nuclear agreement, known as the Joint Comprehensive Plan of Action (JCPOA).
However, the remaining signatories to the nuclear deal maintain that since Washington had left the accord in 2018, it has no right to act under its provisions and cannot initiate the so-called “snapback” of sanctions.
Gold up 3.3%
Following in the footsteps of the currency market, gold prices too pushed higher on Sunday. Emami Gold coin gained more than 3.3%, or 4.15 million rials, to be sold at 126.8 million rials, according to Tehran Gold and Jewelry Union Website.
Bahar Azadi gold coin gained less and changed hands for 117 million rials, 0.9% higher compared to Saturday’s close. One gram of 18-karat gold fetched 11.97 million rials, up 2.4%.
In a talk with IRIB news, Mohammad Keshti-Aray, head of the Specialized Gold and Jewelry Commission, blamed the spike in currency rates for the rising prices of the precious metal.
Pointing to the price difference between Emami gold coin and Bahar Azadi gold coin, he had said earlier that the former is overvalued and is currently traded eight million rials above its real value.