Psychological Impact of War in Israel on Currency Market; Dollar Exceeds 51,000 Tomans

Following the outbreak of war between Israel and Palestinian armed groups supported by the Islamic Republic, the currency market in Iran experienced an upward trend, with the price of each US dollar reaching 51,500 tomans at the time of this report. According to domestic news sources, the price of each Bahar Azadi gold coin also rose from around 28 million tomans to over 30 million tomans in the Tehran gold and coin market. The dollar price in Iran surpassed 51,000 tomans while it had been fluctuating around 49,000 tomans in recent months, despite government officials promising a downward trend in prices for the second half of the year. With the dollar price exceeding 51,000 tomans, a price record from the past four months was also broken. The dollar price recorded at the time of this report had experienced slight fluctuations recently due to US policies in the region. Accordingly, the Wall Street Journal reported on October 5 that Iraq is seeking an additional one billion dollar cash shipment from the Federal Reserve Bank of New York in the US. However, according to the Wall Street Journal, US officials have refused to approve this request, stating that it contradicts their efforts to curb Baghdad's use of cash dollars and combat the smuggling of cash dollars to Iran. Since last November, Washington has prohibited 18 Iraqi banks from trading in dollars and has imposed stricter regulations for electronic dollar transfers from its banks. Iraqi officials stated that US Treasury officials told Iraq's central banks that sending a large additional cash shipment contradicts Washington's goal of reducing Iraq's use of American banknotes. The US wants transactions to shift towards electronic transactions that are easier to track. US officials have stated that there is strong evidence indicating that for years, some of the cash dollars sent to Iraq have been smuggled into Iran, Turkey, Lebanon, Syria, and Jordan. On Saturday, Hamas's terrorist attacks on Israeli territory left hundreds dead and wounded. The Israeli army responded to these attacks by targeting Hamas positions in the Gaza Strip. Clashes continue in some parts of Israel. The spokesperson for the Israeli Foreign Minister stated: 'There is no doubt that the Islamic Republic is behind Hamas's attacks.' The Wall Street Journal also reported that Saudi Arabia is increasing oil production next year 'to attract the attention of the US Congress.'