Rial Gains, Currencies Slip in Tehran

EghtesadOnline: Foreign currencies pulled back on Tuesday in Tehran after weeks amid declining expectations arising from long-awaited positive political developments.

News ID: ۷۸۷۵۳۵

29 December 2021

The dollar dipped further after losing the critical support level of 300,000 rials a day before. It settled at 295,500 rials at the close of trading session in Tehran’s free market – down 3,000 rials or more than 1% on the previous session.

The rial gained ground as currency prices for forward deals dropped on Monday amid positive news and a sense of guarded optimism about the outcome of negotiations in Vienna to restore Iran’s 2015 nuclear deal.

The eighth round of negotiations on the revival of the historic nuclear agreement started on Monday in  Vienna.

Pundits say if the negotiating parties strike a deal, the rial, which has lost much of its value over the past year, may rebound after the 2018 US banking and financial sanctions are lifted as envisioned in the original deal.

Other major currencies also lost ground. The euro was down more than 1% to buy 334,780 rials. The UK pound sterling was tagged at 397,410 rials, 0.74% lower than Monday’s close and the UAE dirham gave up 1% or 800 rials to be quoted at 81,000 rials, according to Eghtesad News website.

However, rates were almost unchanged in the exchange bureaus affiliated to the central bank. The Melli Exchange of the state-owned Bank Melli Iran, tagged the greenback at 274,010 rials.

In the regulated market, where currencies are traded wholesale, the dollar was flat and quoted at 271,800 rials. This market is a CBI-affiliated spot market operated by a network of banks and certified moneychangers dealing in wholesale currency.

As is almost always the case, the domestic bullion market dipped under bearish signs  of the currency market. The popular Emami gold coin was worth 130.25 million rials, down more than 0.5% or 700,000 rials.

The Half Bahar Azadi coin closed nearly 0.6% lower to reach 67.8 million rials and one gram of 18-karat gold was worth 12.85 million rials, 0.5% lower compared to the session before.

In international markers gold climbed as the dollar weakened and concerns over the spread of the Omicron coronavirus variant led bullion's year-end rally to a more than one-month high, Reuters reported.

Spot gold was up 0.3% at $1,816.55 an ounce, its highest since Nov. 22, while US gold futures rose 0.5% to $1,818.40.