Currency Stable, Gold Falters
EghtesadOnline: Currency rates were largely stable on Wednesday after losing 18% during three consecutive sessions of bear market. However, gold prices extended the slide.
The USD traded at 218,000 rials for the most part of Tuesday’s session, save for a temporary hike in later hours where it was quoted at 222,000 rials.
On Wednesday, however, the greenback slightly dropped to 217,000 rials in Tehran’s open market. A euro was worth 252,000 rials and the pound sterling got 275,000 rials.
The weakening of rates is reportedly due to improved supply of foreign currency in the market in recent days. The Central Bank of Iran said currencies worth $342 million was sold Monday in the secondary market know as Nima.
Nima is the main currency platform through which exporters sell their overseas earnings and importers buy.
The CBI’s office of public relations said the UAE dirham accounted for the majority of the offers as 481 million dirhams were sold via Nima for the day. The currency has always been crucial in determining rates in the domestic currency market due to the close commercial ties between Iranian traders and merchants in the neighboring Arab country. One dirham fetched 59,000 rials on Wednesday, down from 60,550 a day earlier.
Addressing a weekly Cabinet meeting on Wednesday, President Hassan Rouhani said the central bank is focused on stabilizing currency rates.
IRNA quoted him as saying that efforts are being made to free Iran’s blocked assets overseas and “steps have been taken to this end with at least three countries”. He did not elaborate or name the countries.
Gold Dips
Despite stable currency rates and a surge in the price of gold in international markets, domestic gold prices slumped again on Wednesday.
The Emami gold coin fell to 100.6 million rials on Wednesday, 2.7 million rials, or 2.7%, lower than Tuesday’s close. The benchmark Bahar Azadi was worth 95 million rials down 2.1% compared to the earlier session, the Tehran Gold and Jewelry Union said.
However, the 18-karat gold gained and was sold at 9.66 million rials, up 1.73% overnight.
Ebrahim Mohammadvali, head of the TGJU, says a portion of gold coin prices is bubble and that the yellow metal is traded higher than its real value.
In a talk with ISNA, Mohammadvali said “despite significant decline in prices, the gold coin is still traded about 8 million rials above its real value”.
In world markets, gold rose more than 1% on Wednesday to its highest in nearly nine years, driven by a softer dollar and as expectations of more stimulus to revive pandemic-hit economies lifted the metal’s appeal as an inflation-hedge, Reuters reported.
Spot gold was up 1% at $1,859.56 per ounce, after hitting its highest since September 2011 at $1,865.35 earlier in the session. US gold futures rose 0.9% to $1,860.40.