Delivery of Pre-sold Coins Adjusts Coin Prices

News agencies and websites in Iran report a decrease in the price of the full coin to less than two million tomans, coinciding with the early delivery of pre-sold coins. The transfer of the coin price to a lower channel than two million tomans is significant because the price of coins had recently increased due to psychological effects from the U.S. withdrawal from the JCPOA, leading to a surge in demand for panic buying. This factor, along with the relative increase in the price of each ounce of gold in global markets, had pushed the price range of the full coin above two million tomans. The two million tomans price threshold had previously been considered a psychological barrier for the coin price, which was broken last week. On Tuesday, Iranian news websites reported the price range of each full coin at approximately one million 970 thousand tomans. Several market analysts believe that the supply of pre-sold coins to the market is the main factor behind the relative price adjustment. The National Bank of Iran began the delivery of pre-sold coins with a one-month delivery date earlier than expected since last Wednesday. On Tuesday, the price of each ounce of gold in global markets remained stable around 1320 dollars, showing little change. Therefore, it appears that the intrinsic value of gold coins has resisted the factors affecting price reduction, preventing further declines in the coin market. Meanwhile, the price of the U.S. dollar in the free currency market, where there is no market for determining the dollar price and trading, affects the price of coins and is also influenced by changes in coin prices. A decrease in the price of coins below two million tomans could affect the nominal dollar price in the free currency market. Nearly a month ago, Masoud Rahimi, the director of the currency and publication department of the Central Bank, predicted that with the implementation of the pre-sale program and the gradual supply of pre-sold coins to the market, the supply and demand for coins would stabilize, ultimately controlling and balancing prices. The Central Bank of Iran has been implementing the gold coin pre-sale program for several months to control liquidity and collect idle capital. The Central Bank has changed the pre-sale phases from one-month and three-month delivery to longer-term pre-sales of six months, one year, and two years, and it has recently halted the gold coin pre-sale program. In recent days, a report on the Central Bank's performance in the pre-sale program has been published, indicating that the Central Bank has pre-sold seven million 650 thousand coins worth 10 thousand 900 billion tomans. 799 thousand coins with a one-month delivery date have been pre-sold, and the Central Bank has begun to supply these coins earlier than scheduled in recent days. According to this report, in July of this year, 666 thousand 500 coins that were pre-sold with a three-month delivery date will also be supplied to the market. Last week, Mohammad Ali Karimi, the public relations manager and spokesperson for the Central Bank of Iran, announced that five million 900 thousand coins would be supplied to the market by the end of this year. According to the spokesperson for the Central Bank of Iran, the highest amount of pre-purchased coins was conducted in Tehran and Isfahan, with 1,154,463 individuals purchasing the pre-purchased coins, averaging 67 coins per buyer. According to the Central Bank's report, the liquidity figure at the end of Bahman last year was 1,490 trillion tomans, and the total amount of pre-sold coins accounts for less than 0.7% of this liquidity. However, since the 10 thousand 900 billion tomans collected in the gold coin pre-sale program directly impacts the monetary base, the actual effect of collecting this capital on liquidity levels will be greater, considering the monetary multiplier. Liquidity consists of two parts: money and quasi-money, including bank deposits, and if liquidity growth is not accompanied by an increase in production levels, it can lead to inflation in the economy and an increase in the general price level.