Iran’s rial sinks to all-time low of 47,000 to the dollar

Iran’s rial sinks to all-time low of 47,000 to the dollar
Currency traders in Tehran stopped selling or buying the dollar as the rial sank to a new low.
By bne IntelliNews February 6, 2018

The US dollar pushed above the 47,000 to the Iranian rial (IRR) threshold by the end of trade on February 5, gaining more than 1.1% and sending the IRR to an all-time low on the unofficial market, the Tehran Gold and Jewellery Union said.

According to independent trading company Olympic Exchange, by the end of the trading day currency brokers were no longer selling or buying the dollar, in a repeat of previous weeks, as they attempted to cut their losses on the depreciating rial. Meanwhile, the Central Bank of Iran (CBI), showing the scope of the rout, listed the US dollar at IRR36,949 on the official exchange mechanism, a rate unchanged since February 1.

Iran’s torrid relations with the Trump administration, the threat that the deteriorating relationship with the US poses to the nuclear deal which protects Tehran from crippling economic sanctions and the social unrest sparked at the turn of the year by economic hardship may all be weighing on the rial.

The euro gained more than 1% on February 5 to be traded at IRR60,000, while the pound sterling was purchased by black market sellers at above IRR67,000, up less than a full percentage point.

Tehran gold traders, who often track the rate of the dollar, have also seen significant gains in their business. One Iranian Bahar Azadi sovereign gold coin sold for IRR14,850,000, moving it up 2.3% over the past seven days.

Iran currently holds more than $132bn in foreign cash reserves and $600mn in gold, local media reported on January 23. With ample reserves of foreign currency in the CBI’s vault, the implication is that people should have nothing to worry about regarding the rial’s stability. Indeed, data in the Central Intelligence Agency’s (CIA) December 2017 factbook edition can be said to back up that point. Iran has higher currency reserves than more than 156 other countries around the world including Norway, Australia and Turkey.

Related Articles

Turkey leaning on local banks to buy more government bonds in debt auctions: report

Economically embattled Turkey is leaning on local banks to buy more government bonds in debt auctions, three people with direct knowledge of the matter were cited as saying by Bloomberg on May 20. ... ... more

Sweden’s Handelsbanken to stop operations in Baltic states

Swedish bank Handelsbanken said on May 16 it was “set to gradually discontinue its operations” in the Baltic states and subsequently close its branches in Tallinn, Riga and Vilnius. “Despite ... more

IFC, EBRD buy nearly half of Romania's first covered bonds from Alpha Bank

Alpha Bank Romania announced that it has completed its first covered (mortgage) bond issue worth €200mn with a maturity of five years, a first for the banking market in Romania.  With these ... more

Dismiss