Rial Hits Another Record Low

EghtesadOnline: The dollar advanced above the critical 280,000 rials at the start of trading week on Saturday as the national currency is tanking under a fresh bout of volatility.

News ID: ۷۸۶۹۱۰

29 August 2021

The greenback closed the day at 282,260 rials in Tehran’s open market, rising 1.2% or 3,400 rials compared to Thursday.

Other major currencies too gained. The euro climbed more than 1.5% or 5,080 rials to fetch 333,940 rials and the UK pound sterling gained 1.5% or 6,000 to reach 389,830. The UAE dirham was worth 76,800, posting more than 1% gain in one day.

To keep pace with trends in the open forex market and reduce price arbitrage, official moneychangers affiliated to the Central Bank of Iran also quoted higher rates.

One dollar was tagged at 272,900 rials at Melli Exchange, affiliated to state-run Bank Melli Iran -- 4,950 rials or more than 1.81% higher compared to the previous session.

Gains in the wholesale market, known as the regulated forex market, were also higher. The American currency was traded at 274,890 rials up 2.4% or 6,570 rials.

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

Market observers point to multiple reasons behind the rapidly raising currency rates, namely the weakened CBI power in regulating the market and apparent uncertainty about the outcome of diplomatic efforts to revive Iran’s 2015 nuclear deal, known as Joint Comprehensive Plan of Action (JCPOA). Reaching a deal would translate into a stronger rial and improve the government’s finances.

Spurred by spike in currency prices and rising trend in international markets, the bullion market in Iran was bullish on Saturday.

The Emami gold coin gained close to 2.1% or 2.55 million rials to change hands at 122.1 million rials. Half Bahar Azadi coin climbed 2.34% to buy 64 million rials and one gram of 18-karat gold bought 11.99 million rials, up 2.4%.

Gold bounced over 1% on Friday in global markets after the US Federal Reserve Chair Jerome Powell stopped short of signaling when the US central bank would start withdrawing its economic support and reiterated his view that current price spikes are transitory, Reuters reported.

Spot gold rose 1.4% to $1,817.21 per ounce and US gold futures settled up 0.9% at $1,819.50.