Dollar Falters, Gold Loses Luster

EghtesadOnline: Foreign exchange rates and gold prices declined again on Tuesday following renewed intervention by the Central Bank of Iran.

News ID: ۷۵۱۳۰۹

21 October 2020

The US dollar lost 12% to fetch 277,000 rials in the open market. Bank-affiliated moneychangers pulled the dollar to as low as 266,510 rials earlier on the day, but later increased it to 275,500 rials, still 12% or 33,420 rials lower compared to the day earlier.

Melli Exchange, affiliated to Bank Melli Iran, quoted the euro at 328,500 rials. The British pound was worth 361,480 rials, down 12.19% compared to Monday's close.

The Emirati dirham lost 8.39% -- falling from 86,000 rials on Monday to 79,350 rials Tuesday evening. In attempts to lift the tanking rial, the CBI has announced measures, namely currency injections, boosting supply in the secondary market (known as Nima) and raising the cap for daily purchase of currency by moneychangers.

Earlier in the week it said it was pumping $50 million in the chaotic market every day to curb prices. The CBI has reportedly injected $385 million in the regulated forex market in the past five days.

Few Buyers

However, according to the CBI website moneychangers bought only $4.7 million of the total when it offered $75 million via the regulated forex market on Tuesday of which $944,000 was sold.

The regulated market is a network of banks and certified moneychangers working under CBI supervision and dealing in wholesale trade.

The CBI also raised the ceiling for purchasing foreign currency by exchange shops and banks in the regulated market to half a million dollars a day.

Exporters collectively offered $142 million in hawala via the Nima market. Nima is a trade platform for currency where importers and exporters interact.

Gold Falls

As the domestic gold market is heavily influenced by forex rates, the precious metal also experienced a steep decline on Tuesday.

According to Eghtesadnews, the Emami gold coin gave up 20 million rials or 14.6% in one day to be worth 137 million rials on Tuesday. It had passed and all-time high of 160 million rials last week.

Half Bahar Azadi coin lost more than 8.5% to reach 76.5 million rials and the quarter Bahar Azadi slipped 14% or 7 million rials to close the day at 50 million rials.

One gram of 18-karat gold was traded at 12.55 million rials, down 12% or 1.54 million rials compared to Monday.