EghtesadOnline: After a recent pattern of decline, forex and gold prices in Tehran are rising again. The dollar, which plunged to as low as 210,000 rials last Monday, climbed to 232,000 rials on Thursday gaining 4,000 rials or 1.8% compared to the earlier session.
Other major currencies also made gains. The euro was up 2.85% to be worth 284,700 rials. The UK pound sterling was tagged at 321,950 rials, 3% higher than Wednesday and the UAE dirham gained 2.3% to be quoted at 65,300 rials, Eghtesad News said.
The greenback was rather choppy in the past three months falling from an all-time high of 320,000 rials in mid-October as investors rushed to the sell side in anticipation of change of guard in United States.
The rial strengthened to a five-month high against the dollar last Monday, as US president-elect Joe Biden prepared to take office and talks about reviving the 2015 nuclear deal and provide sanctions relief to Iran.
The rial has lost more than 70% of its value since May 2018, when ousted US president Donald Trump abandoned the nuclear agreement and imposed tough sanctions on Iran’s economy.
Biden, who was vice president when the Obama administration negotiated the pact, has said he wants to rejoin it and remove the penalties, provided Iran is in compliance.
His presidency also raises the possibility that Iranian oil payments trapped in overseas bank accounts will be released, easing the foreign currency crisis.
“Prospects for the repatriation of billions of dollars that belong to Iran from banks in South Korea and other countries, as well as prospects for sanctions waivers for oil exports, are driving the appreciation of the local currency,” Bloomberg quoted Maciej Wojtal, founder and chief investment officer of Amtelon Capital in Amsterdam as saying.
Gold shot up on Thursday impacted by the currency prices. The Emami gold coin traded for 105 million rials gaining 1.5 million rials or 1.4% compared to the previous session.
Half Bahar Azadi coin was up 3.5% to reach 57 million rials, 2 million rials higher than the previous day. One gram of 18-karat gold fetched 10.36 million rials, 425,000 rials higher compared to Wednesday.
The yellow metal is now traded near its real value and much of the price bubble has burst, according to Mohammad Kashti-Aray, president of Iran's Special Commission of Gold and Jewelry.
"Gold coin was traded almost 20 million rials above its real value in October… now the price bubble has reduce by three million rials," ISNA qouted Kashti-Aray as saying.
International gold prices fell more than 1% on Friday as US Treasury yields and the dollar held firm, Reuters reported.
Spot gold had dipped 1.3% to $1,845.21 per ounce, retreating from its highest since Jan. 8 hit on Thursday. US gold futures fell 0.9% to $1,849.50. For the week, spot gold was up 2.2%, its biggest increase since the week of Dec. 18.