The US dollar increased in price by more than 11 percent in February and grew to more than 500,000 rials. Experts and traders say that the increase in the price of “gold coins” and gold is also a function of the “strange and scary” upward trend of the dollar price.
According to Iranian media, the dollar price consistently increased throughout February. Despite the Central Bank’s efforts to stabilize the currency price, in February, the US dollar price increased by more than 11 percent and reached more than 500,000 rials.
Currency traders have said this model of devaluation is unprecedented and now inflation trends are guiding the market.
According to a Tejarat News report, the package of new EU sanctions against Iran’s regime has disturbed the market and put traders in a buying position.
On Monday, February 20, the European Union added the remaining Iranian banks to its sanctions list. According to some traders, this news may cause the continuation of the rise of gold coins and currencies.
Market analysts believe that during the 40 days since Mohammad Reza Farzin became the head of the Central Bank, the bank has tried hard to keep the price at the bottom of the 40,000-rial range. Analysts say the dollar cost has risen regardless of the rhetoric therapy and does not follow force and orders.
While the regime will continue to claim that the continued depreciation of the rial is caused by foreign powers and sanctions, government-owned and -backed institutions will continue to benefit from the fluctuations in the price of the rial. As the gatekeeper for currency exchange, the regime benefits from the instability of prices. Meanwhile, the people of Iran, who have been suffering from the deteriorating economic conditions caused by the regime’s policies, will feel the brunt of the effects caused by the further devaluation of the rial. Higher prices and inflation will directly impact the lives of millions of people. And given that the regime is benefiting from increased imports at the cost of deteriorating domestic production, the price of many staples and essential goods is directly affected by the price of the dollar.
Gold coins will soon reach the 300-million-rial range
The gold, coins and currency markets are very turbulent these days, so prices hiked on the first day after the holidays marking the anniversary of the 1979 revolution. This jump in prices and rising volatility occurs while, according to the head of the Tehran Jewelry Union, the increase in demand did not play a role in it.
The price of coins reached 290 million rials on February 19, and the dollar cost influenced the coin market’s fluctuation.
Hojjat Shafaei, head of the gold and jewelry producers’ union, complains about the minting of various coins by the central bank in recent years. He criticizes that the high supply of coins causes people to invest instead of buying gold artefacts.
“Iran is among the seven gold-producing countries and almost among the ten gold-consuming countries in the world; this is while the increase in the minting of coins by the central bank and placing various pieces of coins at the disposal of the public has caused people’s taste to change. The cultural attitudes towards gold consumption and value have shifted in the country including India and the Persian Gulf nations.”
In an interview with Khabar Online, Nader Bazrafshan, head of the Tehran Jewelry Association, said, “In Tehran alone, 700 requests for permits to sell coins have been submitted to the union of gold and jewelry. And the Central Bank has given permits to 598 exchanges. Therefore, around 1,300-coin dealers are in Tehran, which is very significant across Iran.”
The head of the jewelry producers’ union believes that many of the price fluctuations we are experiencing today come back to the currency market.
According to the latest statistics, the Central Bank has minted around 80 million coins.
