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.

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TEHRAN (Iran News) – Governor of the Central Bank of Iran (CBI) Abdolnaser Hemmati highlighted Iran’s success in increasing its forex reserves and said they are at an unprecedented level in the past decade.

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Abdolnasser Hemmati said on Monday that prices in the forex market had surged over the past days mainly because of a recent government decision to increase the price of fuel and rumors that Iran would have problems finding a budget announced for the next Persian calendar year starting in late March.

“We do not treat the issue of currency rate and its fluctuations with hysteria,” said Hemmati, adding, “We will bring stability back to the forex market.”

The CBI chief said certain people were benefitting from creating a bubble in the prices of foreign currencies.

“Based on our information, networks outside of the country are also working to increase the currency price,” said Hemmati, without elaborating.

Reports from the unofficial currency market in downtown Tehran on Monday showed that prices had surged by nearly 25 percent compared to late November.

Iran’s rial closed at 138,000 against the US dollar on Monday, the lowest on record for the national currency since early summer.

Hemmati said various factors had played a role in rial’s devaluation in recent days, including continued unrest in neighboring Iraq which had significantly affected Iran’s exports to the Arab country.

He said demand for hard currency had also increased in December mainly because Iranian companies were clearing debts owed to foreigners in days leading to the Christmas.

The chief banker said government’s announcement of an annual budget bill on Monday had also fueled speculations in the market that Iran would face financial difficulties next year mainly because of the American sanctions imposed on the country.

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