Gold and Forex Rise to Historic Levels in Tehran

EghtesadOnline: The price of Emami gold coin rallied to an all-time high of 80 million rials ($410) on Sunday to post a 2.55% increase compared to Saturday's close. Forex rates also continued their mad dash.

News ID: ۷۵۰۲۸۹

22 June 2020

Demand for gold coins has increased in recent days, says Ebrahim Mohammad Vali, head of Tehran Gold and Jewelry Union, noting that the increase in gold prices in international markets has also contributed to the rush to buy the safe haven metal.

Emami Gold coin has gained about 33.3% in the past three months, whereas the price had increased by 70% in the past 12 months.

Spike in the precious metal is primarily attributed to forex rates. According to Eghtesadnews website, each dollar was priced at a record high of 196,100 rials on Sunday in Tehran’s open market -- 5,300 rials higher than 24 hours earlier.

Licensed exchange shops sold the greenback at an average 190,450 rials on Sunday, according to the Association of Bureaux de Change Operators of Iran website.

This is while the rate was 188,000 rials at moneychangers affiliated to banks. The euro also gained 2.8% on Sunday to reach 218,000 rials. Melli Exchange, affiliated to Bank Melli Iran, sold the Eurozone currency for 209,000 rials.

Hamid Qanbari, director of international affairs department at the Central Bank of Iran, believes that the hike in currency prices is mostly baseless.

"Despite the jump in forex rates, demand has remained unchanged," he was quoted as saying by the Association of Bureaux de Change Operators of Iran website.

"The current state of the market seems to be transient," he said.  “The central bank's control mechanism will soon restore stability to the market.”

Market observers see the government’s recent decision to stop selling cheap currency (1USD = 42,000 rials) to fewer goods as a move that sent a negative signal to the forex market that the CBI is facing a severe shortage of foreign currency.