The dollar climbed 10,000 rials to 292,000 rials at the bank-based forex dealers. This was more than 3.5% higher compared to Monday, according to the Tehran Gold and Jewelry Union website.
Crossing the 290,000-rial barrier is the highest ever quoted by CBI exchange shops. They had resisted pushing up dollar rates above this level even after the greenback hit a record-high of 300,000 rials last Thursday.
The sharp increase was reportedly aimed at reducing the price gap with free market rates, which continued to rise incessantly on Tuesday to get closer to historic highs.
In the unofficial market the dollar surged to 296,000 rials, up 3,000 rials compared with Monday’s close. The euro was up slightly by 0.78% or 2,730 rials and bought 348,560 rials.
Price arbitrage between bank-based moneychangers and the free market went as high as 20,000 rials on Monday. This usually encourage buyers to line up in front of bank-based moneychangers for the relatively cheaper currency.
As per law, Iranians can buy not more than $2,200 (or equivalent) in one year from authorized moneychangers by showing their ID cards.
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 jumped 2.85% or 6,758 rials and was sold for 243,657 rials.
The secondary forex market is grappling with shortage of currency given the decline in non-oil export revenues and many export companies failure to repatriate their earnings home as required by law.
Gold Rises
Sensitive to and influenced by forex rates, the domestic gold prices also increased on Tuesday.
Emami gold coin rose more than 2% and was quoted at 148 million rials, rising 3 million rials in one day. It reached a record high of 152 million rials last Thursday.
One Bahar Azadi gold coin was sold for 137 million rials, up one million rials compared with Monday’s session. One gram of 18-karat gold gained 2% to 13.65 million rials, according to the TGJU.
In international markets the yellow metal inched higher on Tuesday buoyed by growing expectations that US lawmakers would agree on new stimulus legislation to blunt the economic impact of the coronavirus, bolstering the metal’s appeal as a hedge against inflation, according to Reuters.
Spot gold rose 0.05% to $1,913.76 per ounce for the day, having hit its highest in almost two weeks on Monday at $1,918.36. US gold futures fell 0.06% to $1,919.