Iran’s currency Rial hits new low against Dollar

Iran’s national currency set a new record low against the US Dollar on Sunday as a result of a race that it appears to be losing on two key fronts: the greenback and the gold.

According to media, the Rial plunged past 113,300 on the unofficial market against one Dollar – the lowest rate ever recorded – before noon. The figure marked a major drop from about Rials 97,500 on Saturday. Other reports said the hard currency was being exchanged between 108,500 and 116,000 Rials.

The previous record depreciation of the Rial against the Dollar occurred in late June when each greenback was traded at Rials 87,000. 

In April, the Rial also plunged to its lowest level against the Dollar in the free market. This took place after the Rial dropped to around 45,000 against the US Dollar from 37,700 in mid-2017.

Commercial bankers at the time linked the Rial’s slide partly to seasonal demand for Dollars. However, some maintained that US President Donald Trump’s hostile rhetoric, including anticipations that he would scrap a landmark nuclear deal with Iran, had been effective in the deterioration of the Rial’s depreciation.

In May, Trump announced that he would pull America out of a 2015 nuclear agreement with Iran and re-impose the sanctions that the deal had envisaged to be lifted.

The sanctions would include a universal ban on Iran over buying or acquiring US dollars which will come into force on August 7 as well as restrictions over purchases of crude oil from the country and investing in its oil sector projects which will become effective by the start of November.

The severe depreciation of the Rial was also reported in the gold coin market. Reports said each benchmark Emami gold coin in Sunday’s trading was priced at a new record high of above Rials 40,000,000 ($363 with each Dollar at Sunday’s average rate of Rials 110,000).

Within hours into the trading day, each Emami coin – which has a purity rate of 90 percent and weighs 8.13 grams – was reported to have been sold at Rials 43,000,000 ($390).

The same gold coins were priced at Rials 37,500,000 ($384 with each Dollar at Saturday’s average rate of Rials 97,500).

The government of President Hassan Rouhani has already taken measures to lower the Dollar fever in the country. In early July, the Central Bank of Iran (CBI) said it had launched a secondary currency market meant to ease tensions around the prices of the Dollar. 

Valiollah Seif, then governor of the Central Bank of Iran (CBI), said the second currency market would enable “minor importers” to buy their required dollars from exporters of certain non-oil products.

Seif emphasized that the price of the dollar would be set according to the supply and demand balance in the market.

He added that the CBI would allow 20 percent of dollars provided from exports of certain non-oil products excluding petrochemicals, steel and colored minerals to be sold to importers in the secondary currency market at rates mutually agreed by exporters and importers. 

Press TV’s website can also be accessed at the following alternate addresses:

www.presstv.co.uk