US Dollar Continues Losing Value against Iranian Rial

The US dollar continued losing its value against the rial on Monday, with each dollar being traded at 220,000 rials, down 11,000 rials compared to Saturday. The declining trend in the value of the dollar against that of the rial began a few days ago, when the price of each dollar stood at 260,000 rials in the Iranian market, IRNA reported. This comes as the value of the euro also continued its decline against that of the rial, with each euro being sold at 266,000 rials on Monday.

On Saturday, the value of each euro amounted to almost 280,000 rials. The increase in the value of the rial has also impacted the gold price in the domestic market with each Bahar Azadi gold coin being sold at 98.5 million rials, down 3.3 million rials compared to Saturday’s price.

In addition, each gram of 18-carat gold was sold at 9.1 million rials in the Iranian market on Monday. Each ounce of gold in the global market was sold at US$1,828 on Monday. Iran’s greater hopes of being able to increase its oil exports and access its frozen assets in foreign banks have been the main reasons for the rise in the value of the rial. The rial’s fresh rebound also comes against the backdrop of hopes in the market that US sanctions on Iran could start to ease with a new administration taking office in Washington as of Wednesday. The dollar had surged to more than 320,000 rials in Iran’s market just days before new Joe Biden defeated incumbent President Donald Trump in US November 3 presidential elections.

However, a stronger rial depressed trade at a once booming Tehran Stock Exchange (TSE) on Saturday, where the main index TEDPIX fell 2.45% to stand at just nearly 1.230 million points. The TEDPIX had rallied to historic highs of over two million points in midsummer. Some economists say weaker dollar is causing havoc among investors holding shares of export companies over fears the firms would perform poorly if the value of the rial keeps surging. Others believe the TSE has lost its momentum because many household investors are no longer interested in buying shares as a means of protecting their savings against market fluctuations.

On January 7, the governor of the Central Bank of Iran (CBI), Abdolnaser Hemmati, said the country earned less than US$20 billion from crude exports in 2020 as sanctions imposed by the US continued to affect shipments. In a post on his Instagram page, Hemmati said that Iran had a very restricted access to the funds generated from crude exports last year. However, he said that limited access to the funds, which he said was half the amount of annual revenues derived from oil exports before 2018, had failed to inflict any serious damage to the Iranian economy. The CBI chief expressed hope that Iran could restore calm to its exchange market in the upcoming months with more exports of oil and the anticipated easing of the US sanctions.

Iranian authorities have repeatedly dismissed claims that US sanctions have had a deep impact on the country’s economy while reiterating that a change of government in the US would not necessarily lead to better ties between Tehran and Washington. Various reports have suggested that Iran has managed to find a way round the US sanctions by increasing its crude exports to levels above one million barrels per day (bpd) from lows of less than 0.5 million bpd seen in early 2019. - Iran Daily