Staying on descending path in the past two weeks, the American currency has lost almost 9% against the rial and given up 23,000 rials since Dec. 30.
The decline is seemingly driven by a new sense of optimism about the success of difficult talks underway to revive Iran’s 2015 nuclear deal known as the Joint Comprehensive Plan of Action (JCPOA).
Almost all parties involved in the talks in Vienna reportedly hold the view that the negotiations are on track and progress is in the making, though at a slow pace.
The talks behind closed doors are taking place between Iran and world powers (minus the United States) that were signatories to the deal. The United States, which unilaterally withdrew in 2018 is participating indirectly.
The long-awaited agreement is expected to help lift the financial markets in Iran, most notably the chaotic currency market, which have seen more than their fair share of volatility after the US administration under Donald Trump announced a new economic blockade of Iran in 2018.
Observers say if there is an agreement, the rial will rebound after the tough US banking and financial sanctions are lifted and billions in Iran’s forex assets held in foreign banks are unlocked.
In tandem with the nuclear talks, official reports talks are alos underway to unfreeze the assets in Iraq and South Korea, which according to the Persian-language economic newspaper, Donya-e-Eqtesad, has led to “declining expectations” abut higher currency prices and pushed currency holders to sell.
Other major currencies also posted big losses on Sunday. The euro was down 2.7% to buy 314,870 rials. The UK pound sterling was quoted at 382,700 rials, 1.2% lower than Saturday and the UAE dirham lost 2.23% or 1,700 rials to be quoted at 76,100 rials.
Currency prices saw less losses in exchange bureaus affiliated to the CBI. The Melli Exchange, affiliated to the state-owned Bank Melli Iran, tagged the greenback at 258,890 rials -- down 0.4% on Saturday.
However, in the regulated market, where currency is traded wholesale, the dollar was priced at 258,840 rials, up 0.2% on the previous session.
Prices in the domestic bullion market took a drubbing on Sunday as news spread that in the open currency market almost all were sellers. The popular Emami Gold Coin was worth 124.2 million rials, down more than 3.4%.
Half Bahar Azadi coin closed 2% lower to buy 65 million rials and one gram of 18-karat gold was worth 11.85 million rials, 2.2% lower on Saturday.