The rate of exchange for the U.S. dollar set yet another record on Tuesday June 23, leaving the 200,000 rials landmark behind and reaching an unprecedented 205,000 rials per dollar rate within half an hour Tuesday afternoon.
This is a 2,864-fold fall for Iran’s currency since 1978, when during the monarchy just 70 rials was worth one dollar.
The rise coincides with the Iranian government's attempt to reassure that it is still in control. The semi-official ISNA news agency reported at mid-day on Tuesday that the government has poured $45 million into the market.
However, money changers in downtown Tehran probably knew it was a bluff as everything in the market indicates that although the government could do such a stunt last year, it is in such a difficult financial situation now that it seems unable to manipulate the market by boosting the supply of cash dollars.
Less than a week ago, Iran's vice president Es'haq Jahangiri reminded everyone of the extremely low oil income as a result of U.S. sanctions on Iran's oil exports and international banking as well as other economic factors.
Jahangiri said that during the past year, Iran's oil revenues dropped from $100 billion to $8 billion and its non-oil exports dropped by 35 percent in the winter of 2018 and another 48 percent during the winter of 2019.
Earlier Tuesday morning, the Rouhani administration tried to trick the market as its spokesman Ali Rabiei told the media some of Iran's frozen assets in various countries have been released, but he could not name even one country.
When asked to name those countries, Rabiei said that the Foreign Ministry will name those countries in the future.
He also contradicted Jahangiri by saying that the situation of Iran's oil exports is improving and that the volume of its non-oil export is going to return to where it was at its best.
Meanwhile, Central Bank Governor Abdolnasser Hemmati characterized the crisis in the forex market as a passing situation and promised it will improve.
Hemmati once again blamed the rising rates of exchange on the COVID-19 pandemic and the psychological impact of the IAEA resolution against Iran last week.
Earlier, President Hassan Rouhani had also said that the rising rates of exchange were "bubbles" and the situation would calm down.
Although some observers still believe that the government is benefitting from the devaluation of its currency and that the Central bank is manipulating the market, but it is unlikely the resulting devaluation of any currency would be helpful for any government.
Observers and laymen have opined on Iranian social media that the resulting rise in all other prices is far beyond the government's control and that the situation is volatile in the society.
Some Twitter users linked the situation in the forex market to the Interior Minister Abdolreza Rahmani Fazli's remarks in the parliament about possible protests in the future.
Meanwhile, a hardliner lawmaker Yaser Jebraili tweeted that $27 billion resulting from exports during the past two years have not been repatriated.
According to a complicated system put in place two years ago, businesses who need foreign currency to buy raw materials for production are supposed to bring back export proceeds to the country. But even the government is complaining that many individuals and companies have not done so, basically cheating the state of foreign currency.
State television news anchor Elmira Sharifi asked in a tweet why the government-owned exchange shops do not convert dollars at a lower price when officials claim that high rates of exchange are bubbles and the rates are coming down?