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Iran’s rial firms after relations thaw with Saudi Arabia

A man looks at a price display in front of a foreign exchange shop in the capital Tehran on March 11, 2023.

Iran’s rial has gained against major international currencies after a political rapprochement with Saudi Arabia that unlocked diplomatic channels between the two countries after some seven years.

The rial closed at 442,500 against the US dollar on Saturday, up from around 500,000 reported on last day of the working week on Thursday.

The price of dollar had reached a historic high of 600,000 rials in late February on concerns that international talks to a revive a 2015 deal on Iran’s nuclear program may collapse.

The official IRNA news agency said in a report that foreign exchange prices had started to crumble as of late Friday when news came out of a deal reached in the Chinese capital Beijing between senior officials of Iran and Saudi Arabia to resume their diplomatic ties.  

The report said the rial would further cement gains in the coming days with an increased supply of United Arab Emirates dirham into the Iranian exchange market.

“As of Sunday, the supply of dirham by currency exchange shops will be eased and as a result the price of the (US) dollar will continue to decline,” said the report, adding that the price of US dollar may fall below 400,000 rials.

Experts said the rial could further rise against the dollar on the back of reports suggesting that Iran may soon be able to access more than $7 billion worth of its funds that have been blocked in South Korea in recent years because of US sanctions.

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