TEHRAN, June 23 (Xinhua) -- Iranian President Hassan Rouhani said on Tuesday that the recent devaluation of local currency against foreign currencies is only a "temporary" matter.
"The shock created in the foreign exchange market is temporary and has no fundamental economic reason," Rouhani told a meeting of the government's economic coordination headquarters.
Major foreign currencies on Tuesday continued to gain value against the Iranian rial.
On the day, one U.S. dollar was traded at 195,970 rials and one euro for 216,970 rials on the street market in the capital Tehran.
The dollar has gained more than 5.2 percent against the rial during the course of a week. The hike put the currency gain against rial at 18.5 percent in the first quarter of the current calendar year that started on March 20.
Market observers see the government's recent decision to stop allocating subsidized currency to fewer goods, including selected food and medicines, as a negative signal to the forex market that the Central Bank of Iran (CBI) is facing a shortage of foreign currency, reported Eghtesad Online, a news website.
The negative political climate is also seen as one of the main factors that has added to the volatility in the currency market recently.
It appears that currency dealers and speculators were riding on a negative psychological atmosphere after the International Atomic Energy Agency passed a resolution on June 19 criticizing Iran.
On Tuesday, Rouhani said that "psychological warfare against Iran as well as the creation of an unrealistic anxiety among people are the main causes of the recent fluctuations in the foreign exchange market."
The Iranian president said the reopening of Iran's border and the return of exports and imports to normal conditions will be effective in restoring calm to the foreign exchange market.
"Expansion of exports and successful efforts to return the forex revenues to the country ... will create a calmer situation in the foreign exchange market," Rouhani noted.
Iran's first Vice President Eshaq Jahangiri on Monday urged Iranian exporters to bring back their earnings from abroad.
The Ministry of Industry, Mine and Trade has also warned that it would revoke export licenses for those who fail to comply with their commitments and bring the hard currency home.
The CBI also said on Sunday that it would publish the names of the violators.
Iran has been grappling with renewed U.S. sanctions for over two years, the novel coronavirus' impact for nearly four months, and low oil prices over the past year.
After U.S. President Donald Trump withdrew from the nuclear deal in 2018 and reimposed unprecedented economic, energy and financial sanctions on Iran, the country has experienced tremendous strain on its economy and finance resources.
The sanctions have caused Iran's oil exports, the country's main source of income, to fall sharply.
Jahangiri said last week that Iran's oil revenues have plummeted to 8 billion dollars from 100 billion dollars in 2011. Enditem
