10:58     04 May 2021    

Foreign exchange rates have plummeted in Iran in recent days with the US dollar hitting a new low against Iran’s currency amid renewed optimism over a possible deal between Tehran and Washington.

The dollar touched a five-month low on Monday, closing at 221,500 against the rial in the free market, marking an almost 15% drop from a few weeks ago, according to Bonbast.com, which tracks unofficial currency-market rates. Market analysts say the last time the greenback traded at this price was in December last year, after which it made a significant recovery to touch 260,000 again. The Iranian currency comes with official and unofficial rates. While the unofficial rate keeps fluctuating, the official rate set by the Central Bank of Iran remains unchanged at 42,000 rials per dollar. In 2015, when Iran and the US signed the historic nuclear deal, the rial traded at about 35,000. The slide was triggered by US President Donald Trump's decision to leave the deal, followed by the reinstatement of sanctions. In the last five years, the rial has seen a 50% loss in value against the US dollar, with dramatic falls and stunning recoveries. The latest fall in the value of the US dollar comes as Iran and major world powers continue negotiations in the Austrian capital Vienna to salvage the 2015 nuclear deal. While the participants continue to differ on the practicalities of lifting sanctions and their subsequent verification by Iran, officials have noted significant progress in the last two weeks. Iran's President Hassan Rouhani also shared the optimism Monday, saying they are "close to the removal of US sanctions" and expressing hope that the country's economy will "get back to the 2014-17 path of moderation and prosperity.” Market analysts, although unsure about the final outcome of the talks in Vienna, say the fall in foreign exchange rates is likely to continue in the coming weeks. The optimism in Iran's forex market is largely driven by prospects of US sanctions being lifted and billions of dollars of Iranian funds frozen abroad being unblocked. There had been reports on Sunday that the US might allow the unfreezing of over $7 billion of Iranian assets in other countries as part of a prisoner swap deal between the two countries. However, the reports were denied by both Iran's Foreign Ministry and the US State Department.