The greenback was traded around 233,000 rials in the previous trading week before soaring to 238,000 rials on Monday as markets reopened after 2 days of religious holidays.
It gained momentum on Tuesday to reach 243,000 rials, up more than 3.5% compared to Thursday’s close.
Other currencies, namely the euro and the British pound sterling, also gained for the day, with the former rising by 2.5% to reach 290,000 rials and the latter traded close to 326,000 rials.
Despite the rally in the unofficial market, exchange bureaus affiliated to the Central Bank of Iran pulled down the USD price slightly (0.25%) to reach 230,000 rials.
A similar upward trend was dominant in the secondary foreign exchange market, known locally as Nima, were forex is traded in the form of hawala.
Nima is an online platform affiliated to the CBI where exporters sell their overseas currency income and companies buy for importing goods, machinery, equipment and raw materials.
In the secondary market the dollar strengthened its foothold above the critical level of 200,000 rials on Tuesday and bought 211,465 rials – up 10,000 rials, or 5%, compared with the previous session’s close, the Tehran Gold and Jewelry Union reported.
There is a significant gap between buying and selling prices at Nima. The selling rate declined slightly by 0.14% to 200,756 rials.
A Nervous Market
The new forex rally is despite the fact that the Governor of Central Bank of Iran Abdolnasser Hemmati recently stressed that “maintaining stability in the forex market and fighting speculative activities” are among CBI priorities.
Market observers link the persistent volatility and nervousness in the currency market partly to tensions and open hostility by the United States to further tighten sanctions against Iran.
Last month the rabidly anti-Iran US secretary of state, Mike Pompeo, said that he would be going to the United Nations soon to begin the process of triggering snapback sanctions on Iran, CNN reported.
The decision, however, is strongly opposed by European countries party to the historic Iran nuclear deal plus China and Russia.
Gold Gains
In the bullion market, the benchmark Bahar Azadi gold coin gained 1.85% to reach 110.14 million rials after making solid gains a session earlier.
One Emami gold coin was worth 113.5 million rials, closing the session 1.5 million rials higher. A gram of 18-karat gold gained 1.58 % and was quoted at 11.1 million rials, according to the TGJU.
In a talk with IBENA, Ebrahim Mohammadvali, head of TGJU attributed the gold rally to spike in domestic forex rates and rising prices in the global precious metal market.
Mohammadvali said the “gold coin is being traded six million rials above its real value apparently due to high demand”.
In international markets, gold jumped more than 1% on Tuesday to a near two-week high, following the steepest fall in the dollar in more than two years as investors bet on US interest rates staying lower for longer, according to Reuters.
Spot gold was up 0.9% to $1,987.89 per ounce, having earlier hit its highest since Aug. 19 at $1,991.91.
US gold futures rose 0.9% to $1,996.10.