The US dollar, which had begun a surprise rally since the past 10 days, gained about 300 rials to be exchanged for 37,720 rials, marking a new record for the greenback against rial in Tehran’s market since mid May.
According to Tehran Gold and Jewelry Union’s website, the rial was quoted at 37,720 to the dollar at last Thursday’s midday trading. However, it gained ground by the end of the day and stood at 37,680 rials per dollar.
Euro has also been gaining against rial in the domestic exchange market for a couple of weeks, but its rally gained momentum during the final days of the previous week. The rial was quoted at 43,650 to the euro on Thursday –a figure unprecedented in recent time.
The jump in foreign exchange rates initially was triggered by Eid al-Fitr festivities marking the end of the Muslim fasting month of Ramadan (June 25), but the continuation of the upward trend of high-demand currencies in Tehran’s market is mostly due to the summer holidays.
As the number of foreign trips rises at the onset of summer, demand for hard currency also goes up.
Other analysts also trace the surge in USD to the crisis facing shadow banks in the Iranian banking system and the region’s military conflicts.
“This is while in global markets, the US dollar dropped to a 12-month low against the euro and weakened against the pound on the prospect of shifts in monetary policy at both the European Central Bank and the Bank of England. The euro is benefiting from market expectations that the ECB has started thinking about reducing their stimulus in light of the improving conditions in the eurozone,” Konstantinos Anthis, a researcher at ADS Securities, was quoted as saying by Market Watch.
” And, in the UK, the Bank of England joins the club of banks turning hawkish after Governor Mark Carney suggested yesterday that there’s a limit to the BOE’s tolerance for above-target inflation,” wrote Anthis.
In tandem with foreign exchange rates, the price of all kinds of gold coin also increased in Tehran’s market on Thursday.
Emami gold coin gained 10,000 rials and fetched 12,160,000 rials ($324.26). Bahar Azadi, another benchmark coin was traded for 11,790,000 rials ($314.4), registering an increase of 20,000 rials. Half Azadi and Quarter Azadi also gained 15,000 rials and 10,000 rials to reach 6,495,000 rials ($173.2) and 3,785,000 rials ($101), respectively.