According to reports from currency exchange houses and the unofficial market, the US dollar traded at 128,500 rials.
On the website Sana, which reports the average exchange rates from the exchange bureaux, the exchange rate was 98,292 rials. Sana's exchange rate tends to tilt toward the secondary market rate that is lower than the physical trade rate.
According to Central Bank of Iran's Governor Abdolnasser Hemmati, only 3% of the dealings at exchange bureaux are in the form of physical trade and the rest takes place in the secondary market where the exchange rate is negotiated between exporters and importers, Financial Tribune reported.
Euro was traded at 149,000 rials, up 7.3% on the previous day, according to Tehran Gold and Jewelry Union's website. The benchmark Bahar Azadi gold coin gained 1.23% and fetched 45 million ($457) rials.
The current bull run was sparked on Saturday when investors took note of the CBI chief's speech in which he signaled frugality in using the bank's resources to calm the currency market.
Addressing the 29th edition of Islamic Banking Conference, Hemmati said the central bank's mission under his watch would be to husband the bank's resources, curb inflation, streamline banks' balance sheets and rein in liquidity.
"Preserving CBI's foreign exchange resources and preventing their wastage are CBI's top priority," he said.
The market took those comments as a sign that a dearth of foreign currency would follow. In his comments on Saturday, Hemmati debunked rumors that the bank intends to raise interest rates significantly to 23% from the current 15%.
The CBI chief also criticized certain entities for lacking the will to curb the rising tide of liquidity, which he considered the "wellspring" of all the country's economic woes.
But later, seeking to allay fears and remove misunderstanding about his comments, Hemmati posted a message on Instagram, saying that his comments had been taken out of context and misinterpreted.
He explained that he was referring to banks and their "incompetent managers" who are a major accomplice to creating liquidity by engaging in interest rate rivalry.
Rate Difference
ISNA reported on Sunday that notwithstanding the bullish trade in the open market, the rates have registered a downward trajectory in the secondary market.
The report said this has created a gap of 50,000 rials between the euro's exchange rate in the open and secondary markets.
According to the report, after the implementation of the new forex policies some 25 years ago, about €1.7 billion have been traded on the secondary market. The top currencies of choice in the secondary market have been euro, Emirati dirham and yuan.
However, the market appears to be heating up even more, as the dollar's exchange rate is approaching the resistance level of 13,000 rials.
The volatility in currency and gold markets further intensified after US President Donald Trump announced in May that he is pulling his country out of the multilateral nuclear deal Iran signed with world powers in 2015.
Earlier this month, Washington reimposed sanctions on Iran’s purchase of US dollars and its trade in gold, precious metals, metals, coal and industrial software.
CBI is trying to calm the volatile currency and gold markets through market mechanisms and less intervention.