Iranian Rial appreciates against USD after Tehran-Riyadh agreement

By Al Mayadeen English
Source: Agencies
12 Mar 2023 22:30
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The exchange value of the Iranian Rial to the US dollar has increased roughly by 50,000 Rials

In this April 4, 2015 file photo, Iranian and U.S. banknotes are on display at a currency exchange shop in downtown Tehran, Iran (AP Photo/Vahid Salemi, File)

After a political reconciliation with Saudi Arabia that reestablished diplomatic relations between the two nations after a seven-year break, the value of the Iranian rial has improved in comparison to the main world currencies.

By Saturday, the exchange value of the Iranian Rial to the US dollar has increased roughly by 50,000 Rials. the Rial was traded for 442,000 Rials on Saturday after being exchanged for 500,000 on Thursday; which is a significant improvement since February when the Rial had unprecedently depreciated: whereby one dollar was worth 600,000 Rials, according to Tasnim.

Foreign exchange rates had already begun to fall by Friday evening when word broke of a Saudi-Iranian agreement to normalize diplomatic relations in Beijing.

An increase in the supply of the Emirati dirham in the Iranian Foreign Currency Market will reportedly help the Rial maintain its regain its value over the next few days.

Additionally, experts assess that the Rial might appreciate further against the dollar following the news that Tehran may soon gain access to more than $7 billion of its frozen deposits in South Korea.

Back in October, a report by the World Bank projected a 2.9% of economic growth in Iran despite the sanctions and embargo.

In February, Russian Ambassador to Tehran Alexey Dedov said as quoted by Sputnik that Russia and Iran are studying the mechanism for using digital currencies for export-import transactions.

Equivocally, Iranian Ambassador to Russia Kazem Jalali said the reduction of the usage of the dollar in bilateral trade will also diminish its impact on the economies of both Russia and Iran.