Iran’s battered currency, rial, rose more than 10 percent on Saturday following an agreement announced Friday to restore diplomatic relations with Saudi Arabia.
The rial has risen 25 percent since February 26 when it dropped to a historic low of 600,000 to the US dollar. A visit by the head of the UN nuclear watchdog, the IAEA, to Tehran on March 4 helped the rial rally, seen as a possible opening to resolve the country’s nuclear dispute with the United States.
The restoration of ties with Saudi Arabia provided another significant boost.
The rial traded at around 450,000 to the dollar Saturday, as the representative of currency exchange dealers in Tehran claimed that demand for dollars “has dropped to zero.”
Iran’s currency began losing value when for US President Donald Trump decided to withdraw from the Obama-era nuclear deal, the JCPOA, in 2018. By August 2022, the rial stood at 300,000 to the dollar, a nine-fold drop since Trump’s decision.
After Biden administration nuclear talks with Tehran reached a deadlock in September, the rial began to fall again reaching its lowest point in late February.
Hope about a possible foreign policy shift to help end Iran’s isolation immediately impacts rial’s value. An agreement with the United States would lift crippling economic sanctions, allowing Iran to export more oil at higher prices and gain hard currency revenues it needs for imports.