Rial Stems Losses

EghtesadOnline: The rial pares some more of its losses against the US dollar on Tuesday amid a noticeable intervention by the Central Bank of Iran.

News ID: ۷۵۰۴۹۸

22 July 2020

The dollar dropped to 217,000 rials in the middle of the trading session in Tehran’s free market, down from 227,000 rials a session earlier to register a 4% drop.

The greenback had lost more than 8% on Monday after touching an all-time high of 260,000 rials on Sunday.

In the late hours of trading, however, the currency again climbed back the 220,000-rial level and closed at 222,000 rials seemingly after rates were low enough to be attractive to buyers.

The euro dropped to 258,000 rials, down 6,000 rials, and the UAE dirham was tagged at 61,250 rials.

The dollar dropped further in moneychangers affiliated to the CBI. They quoted 204,440 rials for a dollar on Tuesday, down 10.5%, or 21,550 rials overnight.

The declining trend comes after the central bank stepped in to regulate rates after days of inactivity. It has increased currency offers in the past three days in the secondary foreign exchange market known as Nima.

Nima is the main currency platform through which exporters sell their overseas earnings and importers buy. Shortage of foreign currency is seen as the main reason behind the spike in rates.

The CBI said on its website foreign currencies worth $342 million was sold at Nima on Monday, up 131% compared with a day earlier.

CBI’s office of public relations said the UAE dirham accounted for majority of the offers as 481 million dirhams were sold to Nima for the day.

Currencies started the downward course on Sunday after the CBI Governor Abdolnasser Hemmati said the bank “has measures underway to restore stability to the forex market”.

The senior banker ascribed the recent turmoil in the currency market to the “unusual piling up of demand” and “exporters’ hesitation” to repatriate their forex earnings.

Keeping pace with declining currency rates, gold prices also fell on Tuesday. One Emami gold coin lost more than 3.5%, or 3.5 million rials, and closed at 103.3 million rials. Bahar Azadi gold coin was sold for 97 million rials or down 2%, according to the Tehran Gold and Jewelry Union.