Currency, Gold Pull Back

EghtesadOnline: After days of consecutive rallies, foreign exchange and gold prices dropped in Tehran on Sunday spurring a bout of selling.

News ID: ۷۸۶۹۱۲

30 August 2021

The dollar bucked a month-long rising trend and retreated to 275,330 rials in the open market, losing more than 2% or 5,720 rials against the national currency.

Rising steadily over the past month, the greenback gained close to 12% from 250,000 rials in late July to 282,000 rials on Saturday.

The euro lost 2.6% or 8,250 rials to fetch 317,000 rials, UK pound sterling shed 2.1% to be worth 382,550 rials and the UAE dirham closed at 75,120 rials, down 2.1% or 1,640 rials.

Supply of foreign currency in the market came after President Ebrahim Raisi expressed concern about rising forex rates and warned against its inflationary impact.

Speaking to his government's economic coordination headquarters, he tasked the economic team with “taking quick and organized measures to control the rise in forex rates and inflation.”

Economic officials were told to find workable solutions to the budget deficit in cooperation with economists and experts, the government official website, dolat.ir, said.

Slump in the chaotic currency market was seen as a possibility after Raisi’s decision for appointing a new governor at the Central Bank of Iran, according to the Persian-language economic website Eqtesad News.

Referring to the rumor mills and social media posts, the website said the president will likely appoint Ali Saleh-Abadi, the present head of the Export Development Bank of Iran, as the new CBI boss.

Observers say change of guard at the central bank could boost the regulator’s power in restoring a semblance of stability to the forex market.

In exchange shops run by the CBI the dollar was tagged at 268,320 rials, 1.7% or 4,580 rials lower compared to Saturday.

Foreign currencies also slipped in the wholesale market, known as the regulated forex market. The American currency was traded at 269,640 rials, down 2% or 5,250 rials.

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

The domestic bullion market was in descending order on Sunday following the decline in currency rates and the weekend closure of global markets.

The Emami gold coin lost close to 2% or 2.35 million rials to drop below the critical 120 million rials and finish at 119.75 million rials.

Half Bahar Azadi coin was worth 63 million rials, losing 1.6% or 1 million rials and one gram of 18-karat gold bought 11.9 million rails, down 1.5% of 173,000 rials.