Rial Settles 5.6% Up

EghtesadOnline: Iran’s national currency pared more of earlier losses on Thursday, gaining 5.6% against the dollar in two days after tanking to all-time lows on Tuesday.

News ID: ۷۵۰۳۲۰

27 June 2020

The US dollar had gained 13% against the rial during eight consecutive rallies reaching a record high of 205,000 rials on Tuesday.

It lost ground to 191,000 rials on Thursday thanks to massive hard currency injection by the Central Bank of Iran.

Following long periods of turmoil in the foreign exchange market, the CBI was reportedly forced to intervene through its affiliate moneychangers to control rates going up without pause.

News outlets said this week that the CBI injected $55 million in hard currency into the market via its affiliate-exchangers.

As yet another move to increase currency in the market, the regulator increased the daily ceiling for currency purchase via authorized exchange bureaus.

IRNA reported Friday that the CBI increased the purchase cap from the previous $200,000 per day to $300,000.

This was with the intention to augment access to hard currency in the licensed exchange shops. In addition, inquiries by news agency indicated remarkable drop in demand for currency in the market in the follow-up to the CBI intervention.

According to IRNA, buyers bought $6 million out of a total $252 million offered in the market. Apart from the CBI supply, offers increased as some dealers took the sell side to save earlier gains.

The recent hammering of the rial was the worst in more than a year. The national currency had remained stable after losing more than half its value after Donald Trump in 2018 withdrew from the historic nuclear deal Tehran signed with world powers and imposed tough new sanctions to choke the economy.

The government blames the currency crunch to exporters’ failure to repatriate their earnings home. CBI Governor Abdolnasser Hemmati said this week that out of the $72 billion revenue generated from non-oil exports in the past two years, $27 billion has still not been returned to the country.

One euro bought 214,000 rials on Thursday, down 4,000 rials compared to Wednesday’s close. The UK pound sterling changed hands for 232,000 rials and the UAE dirham was tagged at 53,500 rials.

A dollar was worth 188,430 rials in bank-based money exchanges, down 2.4% compared to a session earlier, according to the Tehran Gold and Jewelry Union website.

Impacted by trends in the currency market, gold prices also dropped in Tehran’s market. One Emami gold coin was worth 82.18 million rials on Thursday, compared to $83.5 million a day earlier.