EghtesadOnline: Foreign exchange rates in Tehran were mostly unchanged Saturday as the market waits for the outcome of diplomatic efforts to revive the landmark Iran nuclear deal and lifting of the US economic blockade.
According to Eghtesadnews website, the dollar was priced at 238,200 rials in the free market down 0.09% compared to Thursday.
Foreign currency prices have dipped in the past several weeks. The greenback recorded negative returns for the second successive month losing 4% in the month to March 19, and down 5.3% ending April 20.
Decline in demand and rates is apparently due to positive developments and reports related to talks in Vienna between Iran and the world powers to restore the nuclear deal. Meetings started in early April to bring back Tehran and Washington into full compliance with the accord.
As the political climate cautiously improves, sentiments of avaricious currency dealers and middlemen have weakened. They now expect a weaker dollar if and when the United States under President Joe Biden rejoins the nuclear agreement and ends the tough economic restrictions imposed by his predecessor.
The deal officially known as the Joint Comprehensive Plan of Action (JCPOA) was abandoned in 2018 by the confrontational Donald Trump who imposed new economic sanctions against Iran. In response, Iran scaled back its nuclear commitments envisioned in the accord.
President Hassan Rouhani has said his administration will do everything it can to “restore the rights of the Iranian people” by securing the end of the unjust sanctions.
Market observers and traders say that the dollar could fall considerably, even up to 20,000 rials, if the Iran and the world powers thrash out an agreement acceptable to Tehran and the Biden administration.
Impact of the Regulated Market
Positive political developments seem not to be the only impacting factor behind the lower forex rates.
Eghtesadnews website, in a report Friday, referred to the considerable increase in forex supply at the regulated market. "Exporters offered record-high volumes at the regulated market that by extension pulled down prices in the free market."
The regulated market is a network of banks and certified moneychangers working under CBI supervision who deal in wholesale forex trade.
A review of prices in the regulated market shows that the weekly average dollar price last week was 234,530 rials, down 1.5% compared to the week before. The weekly average euro price was 3.7% lower. Figures also show that the total number of deals last week was three times higher than the week before.
On average price of the greenback, however, rose 0.04% in the Central Bank of Iran regulated market to fetch 231,200 rials.
Other Currencies and Gold Coins
Price of the euro increased 0.12% or 350 rials in Tehran's free market reaching 287,830 rials. The British pound lost 0.55% on the first day of the week to trade at 330,060 rials.
The UAE dirham gained 0.22% to be sold at 65,750 rials and the Turkish lira lost 1.76% and was quoted at 28,400 rials.
Gold coins also continued on the downward slope on the first day of the week. The Emami gold coin lost 0.4% and was sold for 100.5 million rials.
Half Bahar Azadi gold coin was unchanged compared with Thursday's close at 56 million rials. It had lost 5.6% on Thursday. The quarter Bahar Azadi coin also was stagnant at 36 million rials. Gold coin prices in Iran are largely influenced by domestic forex rates rather than prices in global markets.