Maryam Sinaee

The dollar has settled, at least for now, at around 270,000 rials in the Tehran open market after frantic days of confusion in money bureaus during the first days of the vote count in the United States presidential election.

The dollar dropped from around 300,000 to around 225,000 rials on Wednesday November 4 as US analysts and pundits began to see Joe Biden as a likely winner over President Donald Trump and a return to the 2015 Iran nuclear deal became more viable. Other foreign currencies also dropped in par with the dollar.

Possibly due to Central Bank of Iran (CBI) and other entities buying the cheaper foreign currencies, the dollar rose again to around 230,500 on Sunday November 8 and 270,000 rials on Monday November 9. Since November 10 the exchange rate has been steady. On Friday [November 13] the dollar was trading at 270,200, only 1,000 rials above the previous day.

While this is lower than the dollar’s record high of 320,000 on October 18, forex experts say they do not expect the dollar to return soon to the November 4 rate of 225,000 and that it will stabilize at around 250,000.

In an interview with Fararu website on Friday, economist Vahid Shaghaghi, attributed the dollar’s recent rise to the CBI purchasing dollars that small investors were afraid to hold on to. The CBI managed to collect a good sum, Shaghaghi said, while its demand led to the dollar’s rebound against the rial.

Shaghaghi suggested the CBI would use the collected dollars to manage rates in the coming days without having to touch other resources. “I believe the dollar will stabilize at 230,000 in the near future with the CBI intervention,” he ventured.

Eghtesad News, an economic and financial website, however, on Thursday said the CBI-authorized Melli Exchange Company, which leads market rates in government-authorized exchange bureaus, was aiming to the dollar within a range of 230,000 to 280,000.

The 300,000 mark, reached on October 1 for the first time, was considered a milestone in Iran’s forex market as it marked a ten-fold fall for the rial in the three years since Trump assumed the presidency and seemed set to withdraw from the 2015 nuclear deal and impose draconian sanctions, as he did in 2018.

Many experts advised caution after the dollar fell sharply as votes piled up for Biden, pointing out that the rial’s rise might be be temporary and in the longer-term would reflect realities on the ground.

“We need to keep in mind that the dollar may have fallen [against the rial] temporarily, but inflation still has a strong presence in [the Iranian] economy and we should expect the dollar to rise again if a remedy is not found for inflation,” Kazem Jalalitalab, a financial expert, was quoted by Young Journalists Club (YJC) as saying on November 8.