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Sahmino callsCurrency

Dollar Exchange CenterUSD_ICEBullish

The gap between the remittance dollar and the free-market dollar narrowed from 41.6 to 36 percent in one month; the exchange center rate stands at 1,728,507 rial

Horizon: Short-term (about 10 days, until 15 Mehr 1405)

Price when published

1,728,507 rials

That dayup0.7%

Resistance

1,750,000 rials

Invalidation

1,717,400 rials

The levels on the chart

Since writtenup2.6%

Conclusion

I remain bullish and hold the target of 1,750,000 rial by 15 Mehr with about 70 percent probability; I'm raising the invalidation level one step, from 1,706,268 to 1,717,400 rial. The risk is right here: this is the Central Bank's dictated rate, not the market's, and a single announcement could halt the steps or reverse them.

The evidence

  • The bullish view from 5 Mehr still holds, and the invalidation level of 1,706,268 rial remained out of reach. Today, 6 Mehr at 8:02, the exchange center's dollar remittance selling rate rose another step of 11,107 rial, reaching 1,728,507 rial.
  • This rate has risen about 7.7 percent since 14 Shahrivar (1,605,024 rial) and is above the 20-day average (1,655,903 rial). About 21,493 rial remains to the target of 1,750,000 rial, meaning two steps of the same size.
  • The gap with the free-market dollar (2,350,000 rial, 5 Mehr) is about 36.0 percent; on 14 Shahrivar this gap with the free-market dollar of 2,272,050 rial was about 41.6 percent. The gap has narrowed by about 5.6 percentage points in one month.
  • Channel of effect: exporters (petrochemicals, metals, refining) convert their foreign currency revenue at this same rate while their costs inflate at the free-market rate; so a rise in this rate and a narrowing gap is a positive driver for them.

If it holds

If the rate stays above 1,717,400 rial and the roughly 11,000-rial steps continue, the base scenario is reaching 1,750,000 rial before 15 Mehr.

If it breaks

If the rate falls back below 1,717,400 rial, this view is invalidated, meaning the Central Bank has halted the stepwise path.

What to watch

What to watch: the size of the daily step in the exchange center's announcements, any Central Bank stance on unifying the exchange rate, and the percentage gap with the free-market dollar, which is now about 36 percent.

Every call on this symbol

15 calls; the move to the next call from the prices when written

  1. 28 September 08:42BullishThe gap between the remittance dollar and the free-market dollar narrowed from 41.6 to 36 percent in one month; the exchange center rate stands at 1,728,507 rial1,728,507 rialsup2.6%
  2. 27 September 08:38BullishThe 11,132-rial step this morning took the remittance dollar to 1,717,400 rial; the bullish view's floor moved up one step1,717,400 rialsup0.6%
  3. 26 September 08:39BullishThe exchange center's 1,704,117 rial dollar target was filled on 2 Mehr, and the daily steps have doubled1,706,268 rialsup0.7%
  4. 23 September 08:40BullishThe gap with the free dollar narrowed from 44.8 to 38.5 percent, and most of this closing was with the administrative rate, not the market1,695,018 rialsup0.7%
  5. 21 September 08:40BullishToday's step was 0.734 percent, higher than the formula where thirteen consecutive sessions stayed at exactly 0.300 percent1,675,988 rialsup1.1%
  6. 19 September 08:56BullishThe thirteenth consecutive step was exactly 0.300 percent, but the gap with the free dollar narrowed this time1,663,768 rialsup0.7%
  7. 16 September 08:50BullishThe gap between the official transfer rate and the free dollar widened from 20.1 to 39.3 percent in one month; this means pressure on exporters' profit margin1,653,830 rialsup0.6%
  8. 14 September 08:59BullishNine steps in a row, exactly 0.30 percent: the remittance rate is no longer a trend, it's a formula1,643,951 rialsup0.6%
  9. 12 September 11:35BullishFirst narrowing of the gap from the top: the free dollar fell 0.33 percent and the remittance rate rose 0.30 percent as usual1,634,132 rialsup0.6%
  10. 9 September 08:57BullishFree-market dollar up 22 percent in one month while the hawala rate rose just 5 percent; this difference in speed is eating the exporter's profit margin1,624,371 rialsup0.6%
  11. 7 September 10:51BullishThe gap between the remittance rate and the free dollar rate widened from 20 to 38 percent in a month, but yesterday it narrowed slightly for the first time1,614,668 rialsup0.6%
  12. 5 September 08:59BullishExchange Center's remittance dollar passed even the 1.6 million rial ceiling; gap with the free-market dollar widened to near 38 percent1,605,024 rialsup0.6%