EghtesadOnline: The rising tide of foreign currency rates against the rial paused on Saturday after soaring to record highs last week. The slide extended to the bullion market.
A dollar was quoted 266,000 rials for the day at Tehran’s open market, down 3,000 rials, or 1%, compared with Thursday’s close.
Currencies made unprecedented gains last week when the greenback was quoted at 273,000 rials on Monday reaching an all-time high. It gained 4.9% during the week-long period.
The steep surge compelled the forex market regulator to intervene and control rates with currency infusion. The intervention, mainly through exchange bureaus affiliated to the Central Bank of Iran, has stopped the dollar from further advance, at least for now.
CBI-affiliated moneychangers reduced the dollar rate by 1.3% on Saturday to 264,540 rials after pushing up rates by 12% on Monday to reduce arbitrage with forex rates in the open market.
Likewise, the euro lost 5,100 rials, or 1.63% and was quoted at 313,360 rials. The British pound sterling recorded 1.71% drop and was sold at 343,500 rials. The UAE dirham fetched 72,600 rials, down from 73,400 quoted a session earlier, Eghtesadnews reported.
The decline could also be linked to the CBI’s latest measure to boost the secondary forex market, known as Nima.
Struggling to boost the supply side, the Governor of the Central Bank of Iran Abdolnasser Hemmati said Wednesday that giant exporting companies, namely exporters of mineral, steel and petrochemicals can sell their earnings directly to all exchange shops. Previously, they were allowed to sell their proceeds only to CBI exchange bureaus.
Nima is a trade platform where exporters sell their proceeds and companies buy to import goods. Shortage of hard currency in this particular market has often been blamed for the steep rise in forex rates in the past several months.
Rates in Nima are lower than open market. One dollar was worth 208,219 rials in the secondary market on Saturday, according to the Tehran Gold and Jewelry Union website.
In the bullion market, Emami gold coin lost 330,000 rials, or 0.26%, on Saturday, to be sold at 127.81 million rials. The benchmark Bahar Azadi coin also dropped 0.82% and was worth 122.14 million rials, according to TGJU.
In a talk with ILNA, the vice president of TGJU, said despite the decline in Emami gold coin prices it still is traded almost nine million rials higher than the real value. It was not clear what he meant by ‘real value’.
Gold prices rose on Friday in world markets as the dollar slipped, while lackluster US employment data and vows by major central banks to roll out further stimulus if required to revive their coronavirus-hit economies also bolstered the metal's appeal, Reuters reported.
Spot gold climbed 0.4% to $1,951.13 per ounce, having fallen to a one-week low in the previous session. US gold futures were up 0.6% at $1,960.80.