Iran: Forex, Gold Continue to Fall

EghtesadOnline: Major currencies extended losses against the rial on Sunday with the dollar closing the session more than 3.7% lower.

News ID: ۷۵۱۴۹۱

16 November 2020

The greenback surrendered the 260,000-rial support level in the later hours of trade and was quoted 259,000 in Iran’s free market, down 1,000 rial compared to the day earlier.

Likewise, the euro lost 12,000 rials to reach 306,100 rials, down 4% and the UK pound sterling fetched 341,000 rials, 4.1% lower compared to Saturday.  The UAE dirham was also down 5%, losing 3,600 rials to fetch 72,200 rials.

Slide in rates was also seen in the official exchange bureaus affiliated to the Central Bank of Iran. Melli Exchange quoted the greenback at 250,000 rials.

In sum, the dollar has lost more than 22% since it reached the all-time high of 320,000 rials almost a month ago. The declining trend was apparently triggered by the contested US elections.  The greenback went into a tailspin last week as prospects of a strengthened rial and the almost certain changing-of-the-guard in the White House weakened sentiments.

For most, if not all, investors and speculators, the embattled Donald Trump's four more years in office could translate into higher pressure on Iran's economy and further undermine the national currency that has been in a free-fall for months.

The American currency gained some ground in the middle of last week and rallied for three consecutive days before heading downward from last Wednesday. The CBI says it has boosted the supply side of the forex market by injecting millions of dollars into the volatile market.

It said it also strengthened the secondary forex market, known as Nima, where non-oil exporters sell their export proceeds to importers.

***Gold Loses Luster

Impacted by the decline in forex rates, as is the norm in Iran, the domestic bullion market also moved downward. Emami gold coin lost almost 5% or 6 million rials on Sunday to reach 122 million rials. Losing more than 25% over the past month, the coin was the worst-performing asset during the month from Oct. 15 to Nov. 15, marking the day the coin reached the record high of 163 million rials, according to the Persian-language economic daily Donya-e-Eqtesad.

Half Bahar Azadi coin was down by 4 million rials to reach 66 million rials -- a 6% daily decline. One gram of 18-karat gold was worth 11.6 million rials, down 3.7%, according to Tehran Gold and Jewelry Union website.