The dollar dropped more than 1.3% or 4,000 rials in Tehran’s unofficial currency market, retreating to 301,500 rials. The greenback gained 3% last week to cross a 14-month high of 306,500 rials. It briefly touched the critical 310,000-rial.
Other currencies pared some the previous gains against the rial. The euro lost 1.5% or 5,090 rials to buy 342,930 rials and the UAE dirham followed shedding 1.3% to close at 82,300 rials. Likewise, the UK pound sterling bought 401,890 rials, down 1.48% or 5,970 rials on Saturday.
Observers link the pause in rates to a combination of measures taken by the CBI to stabilize the market plus optimism about the fate of the ongoing negotiations in Vienna between Iran and the five countries party to the battered 2015 nuclear deal, also known as Joint Comprehensive Plan of Action (JCPOA).
Negotiators are trying to revive the deal, which was abandoned by Donald Trump in 2018. After withdrawal, the controversial US president, now facing criminal charges in his own country, imposed tough sanctions on Iran’s economy, including its financial ties to the outside world and major international banks and lending institutions.
If there is a breakthrough in Vienna, experts say the rial, which has lost much of its value over the past year, may come back and the banking/financial sanctions would be lifted as Tehran has called for and is also envisioned in the original 2015 nuclear deal.
In addition, the government decision to impose tax on currency trade has perturbed investors and compelled them to take extra caution. Last week, the Iranian National Tax Administration said 10% tax will be levied on each foreign currency transaction.
Currency prices were almost unchanged Sunday in the exchange bureaus operated by the CBI. The Melli Exchange, affiliated to the state-owned Bank Melli Iran, tagged the dollar at 276,930 rials, indicating 0.1% decline compared to the session before.
In the regulated market, where currencies are traded wholesale, the greenback was almost unchanged and quoted at 274,220 rials. The market is a CBI-affiliated spot market operated by a network of banks and certified moneychangers dealing in wholesale currency.
Gold prices also dropped in tandem with forex rates. The popular Emami gold coin lost 0.3% to change hands at 130.7 million rials. Half Bahar Azadi coin was down 0.3% to reach 68.3 million rials and one gram of 18-karat gold was worth 12.9 million rials down 0.5% on Saturday.