Rial gains after Trump’s sickness hurts re-election chances
Iran’s rial has strengthened against the US dollar in the unofficial market mainly on speculations that US President Donald Trump’s sickness could hurt his re-election chances in the next month’s elections.
Currency traders in downtown Tehran were of the idea that Trump’s infection with the coronavirus and his poor performance in a first presidential debate held earlier this week had contributed to the rial’s growth.
US dollar dipped to 286,000 against the rial later in the day, down nearly five percent compared to Friday when the Iranian currency hit a new record low.
According to reports, measures taken in recent days by the Central Bank of Iran (CBI), including removing a cap on trade in a secondary exchange market, had also played a role in the market.
Traders said the rial will continue to firm against other currencies over the next few days although some said Trump’s discharge from hospital, expected on Monday, could reverse the trend.
However, experts believe the dollar could lose almost a third of its value against the rial immediately after a potential loss for Trump in the November 3 election.
An official price of 42,000 for the rial against the dollar is still used by the government to fund imports of staples and medicines. The price has not changed since early 2018 when the national currency began its fall on news of the United States would leave a nuclear deal with Iran and impose extensive sanctions on the country.
Gold also fell sharply on Sunday with benchmark gold coin known as Bahar Azadi dropping to 135 million rials, down 10 percent compared to Saturday.
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