Pressure Mounts on Rial

EghtesadOnline: Major currencies again gained against the rial on Monday with the dollar soaring above the critical 230,000 rials in Tehran’s free market.

News ID: ۷۵۰۴۲۶

14 July 2020

The greenback climbed 5,500 rials to 233,000 rials, 2.5% higher compared to Sunday’s close. One euro was worth 260,000 rials, up 2,500 rials overnight.

Spike in currency rates is partly attributed to increase in demand for the UAE dirham as trade activity is getting back to normal after more countries lifted the pandemic restrictions.

Dirham has always been crucial in determining rates in the domestic currency market given the close commercial ties between Iranian traders and merchants in the neighboring Arab country.

One AED was worth 64,450 rials on Monday, more than 2,500 rials higher than Sunday’s close.

The Governor of the Central Bank of Iran Abdolnasser Hemmati earlier linked currency volatility to pent-up demand for forex resulting from restrictions introduced to fight Covid-19.

Gold Gains

Gold coin prices also hit new records on Monday thanks to soaring currency rates and bullish global market trends.  The Emami gold coin pushed up above 106 million rials and soared to touch 107 million rials, up 3.1 million rials, or 3%, over Sunday’s close.

The benchmark Bahar Azadi was worth 100 million rials, rising 3.1% compared to Saturday. One gram of 18-karat gold sold for 9.86 million rials, up 2.6% overnight and drawing closer to the critical 10 million rials, according to data released by the Tehran Gold and Jewelry Union.

Market data show that gold coin prices have shot up 35% since the beginning of the current calendar month (June 21) making it one of the critical markets on the heels of the burgeoning bourse, which has soared over 40% during the period.

In global markets, gold firmed above the key $1,800 an ounce level on Monday, supported by uncertainty over the impact of surging coronavirus cases and a subdued dollar.

Spot gold was up 0.6% to $1,808.25 per ounce. US gold futures were up 0.6% at $1,813.30, Reuters said.