Two factors causing the dollar to fall
On the last working day of the week, the situation in the currency and coin market changed. Domestic dollars and precious metals, which were on an uptrend on Monday, faced selling pressure on Wednesday and lost significant support. On this day, the dollar did not maintain the border of 28 thousand tomans and decreased by 240 tomans to the price of 27 thousand and 900 tomans. Due to the fall in the price of the dollar, the coin also recorded a price reduction of 100,000 Tomans, and with the loss of support at the border of 12 million Tomans, it was in the range of 11 million and 970 thousand Tomans. According to activists, the decline in markets on the last working day of the week was due to the impact of two variables; The first is Iran’s signal that negotiations are likely to begin in the near future, and the second is the election of a new governor for the central bank.
The foreign minister announced in the middle of the week that Iran’s investigation into the Vienna talks was being finalized and that we would announce when talks would begin. This signaled to traders Iran’s serious desire to return to negotiations. Most traders in the foreign exchange market believe that lifting the sanctions will greatly narrow the scope for the dollar to rise, which is why it is important for market players to start foreign exchange negotiations, as it is the beginning of a path to the possible lifting of sanctions.
After Hassan Rouhani took office in 1992, the foreign exchange market quickly declined, without sanctions being lifted. At that time, the market welcomed the reduction of prices with the possibility of starting negotiations. A similar thing happened in 1999. When traders realized that Trump would not be the next president of the United States, foreign exchange sales in the market gradually increased and the price of the dollar moved away from the border of 30,000 Tomans. In recent months, however, nuclear talks have stalled and the possibility of lifting sanctions has diminished. This issue caused the American banknote to increase over 3500 Tomans in summer.
The second factor influencing the foreign exchange market on Wednesday was the election of a new central bank governor. Salehabadi, the new head of the Central Bank, said that controlling inflation, stability in the foreign exchange market, monitoring the banking network, preventing the increase of the monetary base, directing bank resources to productive sectors, providing incentives for developing non-oil exports and engaging with partner countries in foreign exchange. The most important plans of the central bank in the future.
According to activists, traders felt that the new directorate might increase the supply of foreign exchange at the beginning of its term, given Salehabadi’s remarks. That is why some traders left the market on Wednesday. If the supply of currency does not change significantly at the beginning of this week, the dollar can return to the channel of 28,000 Tomans. Some traders are also waiting to buy as the supply of currency increases at lower levels.
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