Currency and Gold Climb in Iran

May 11, 2021
banking

C urrency and gold prices increased on Monday contrary to expectations of the Central Bank of Iran that rates will decline as the Iran nuclear talks in Vienna make progress.

The dollar gained 2.54% to be sold at 219,200 rials in Tehran’s free market, Eghtesadnews reported. Bank-affiliated exchange shops demanded 212,320 rials for the greenback -- 4.32% higher than the previous day.

The rates gained pace hours after the CBI boss Abdolnasser Hemmati's talk on state TV. Hemmati referred to the decline in forex demand at the regulated market claiming it was a sign of further decline in the coming days.

'The current rates are unreal and will decline and the dollar is likely to fall below 200,000 rials,' he said.

The regulated market is a network of banks and certified moneychangers working under CBI supervision and dealing in wholesale trade.

Diplomats from Iran and the major powers in the Austrian capital are working to find ways to revive the nuclear pact blown up by former US president, Donald Trump, in 2018 who imposed the toughest sanctions in history against Iran’s economy, namely on oil export, banks and insurance companies.

Under the relatively positive political climate and anticipating a boost to the national currency, the greenback lost 8% late last month.

Talks over unlocking Iran's forex assets in foreign banks are making progress, the senior banker said, without providing details. However, he did say that the CBI has no plans to use its (freed) assets for boosting the chaotic currency market.

He said the CBI has held 'extensive talks' with several countries in which Iranian assets are blocked, including Oman, Iraq and Japan.

The euro gained 2.67% during the day and bought 267,960 rials. Melli Exchange, affiliated to Bank Melli Iran, sold the European currency at 250,330 rials, 1.92% higher than Sunday. The UAE dirham was 2.86% higher at 60,130 rials.

Emami gold coin which is popular with most investors in Iran, also gained and was traded at 95.8 million rials on Monday, up 2.6% compared to Sunday's close.

Half Bahar Azadi and Quarter Bahar Azadi gold coins, however, continued their downward trend. The former lost 1.97% and was sold at 51 million rials while the latter was priced at 32.25 million rials, down 2.33%, compared to Sunday's close.

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