CBI Optimistic About Lower Forex Rates

EghtesadOnline: Foreign exchange rates increased again Monday, with the dollar recording gains for the second day in a row. The Central Bank of Iran, however, said it expects further decline in rates.

News ID: ۷۵۱۴۴۹

10 November 2020

The dollar was quoted at 266,000 rials Monday in Tehran’s open market or up 4.88% compared with Sunday's close. It had lost 9.3% on Saturday following the election victory of Democrat Joe Biden in the US presidential elections.

Likewise, the euro gained 4.11% to 313,470 rials. The European currency fell to 293,430 rials on Saturday after it losing 9.4%, Eghtesad news reported.

However, Abdolnasser Hemmati, the CBI governor, said the regulator awaits further decline in rates.

"I had warned about putting money in the forex market…rates were irrationally rising under the influence of non-economic factors," he told the Persian-language newspaper ‘Iran’.

Foreign exchange rates are expected to fall further, which also is favored by the CBI, he said.

"The CBI will be able to control the currency market and stabilize rates, once non-financial factors lose their impact," Hemmati said.

In a post on his social media account on Saturday, he said the regulator wants to create conditions wherein forex trade would be the function of “market mechanisms."

Alluding to the impact of the US election result the domestic currency market, he said the CBI "functions regardless of external political developments".

The "CBI's approach is defined by national economic interest, stability in the markets and inflation target."

Market analysts say the upward trend in currency prices seen over the past several months is unlikely to last because the market normally is highly responsive to political developments.