TEHRAN (Iran News) – The rate of US dollar in the Iranian market witnessed a significant drop of 200,000 rials on Tuesday, to continue its declining trend for the second consecutive day.

The same kept happening to the euro’s rate for the second successive day, which fell by 150,000 rials on Tuesday, to be sold at 236,000 rials in the foreign currency market, IRNA reported.

On Tuesday, official currency exchanges sold and purchased each US dollar at 206,000 rials and 199,000 rials respectively.

According to sanarate.ir, an information website belonging to the Central Bank of Iran (CBI) announcing the rate of foreign currencies in the domestic market, the rates of the dollar and euro had declined by 150,000 rials and 170,000 rials on Monday to stand at 229,160 rials and 253,360 rials, respectively.

Over the past few days, prior to the start of the downward trend, the rates of the two major currencies had kept soaring, reaching record highs.

The rate of the rial began its declining trend in May 2018, when the US withdrew from the Joint Comprehensive Plan of Action, signed between Iran and the P5+1 in July 2015, and the reimposition of Washington’s unilateral sanctions on Tehran. Mainly targeting Iran’s foreign trade, including oil exports, and the banking sector, the sanctions have been imposed in a bid to cripple the Iranian economy, a pipe dream pursued by the US and its allies, including Israel, which never came true.

Iranian officials maintain that in addition to the unilateral sanctions, psychological factors also led to the increase in foreign currency rates over the past days.

In an address to a press conference on Tuesday, Ali Rabiei, the Iranian government’s spokesman, blamed psychological manipulation of public opinion by ill-wishers on social media and abroad for the rise in the rates, according to mehrnews.com.

He said such bids lead to an anticipation of inflation in the domestic market.

Rabiei added that among the reasons for the drop in the rates is that Iranians have stopped heeding such activities and propaganda.

“Our foreign currency income will definitely increase in the light of our oil exports and the injection of forex revenues into the domestic economy. The real foreign currency rates are definitely lower than what we see in the market today.”

He stressed, “During the past two weeks, Iranian President Hassan Rouhani and CBI Governor Abdolnaser Hemmati explicitly announced that the increasing trend of forex rates would not continue, and the reason is clear. The realities of our market, as well as the balance between supply and demand, show that the increase in rates is not real.”

He added Iranian exporters are increasing their injection of foreign currency income into the country’s secondary foreign exchange market, known by the local acronym Nima (Integrated Forex Deals System), thus tilting the balance in favor of the supply side of the domestic market.

Rabiee said this comes as the government has also controlled the demand side by boosting domestic production.

“Stimulating domestic production will not only reduce domestic demand for foreign currency resources but will also help further increase the country’s output and reduce the price of other products.”

He noted that the government’s diplomatic moves in the field of foreign policy have also helped provide the country with better access to foreign currency resources, expressing hope that Iran’s exports would grow with the easing of restrictions imposed on trade between regional countries due to the coronavirus outbreak.

The pandemic has led to the closure of border crossings between Iran and its neighbors and, thus, reduced exports from the country.