10/09/2013, 00.00
IRAN
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Obama-Rouhani talks have positive effects on the rial

The dollar-rial exchange rate is following the vagaries of political relations. The Iranian currency gains against the dollar after the two presidents' conversation, reacts negatively to Pasdaran criticism and Obama's statement on the Iranian nuclear issue, and improves again after Khamenei's remarks.

Tehran (AsiaNews) - Relations between Iran and the United States appear to be improving, however slightly, as symbolised by the phone call between Barack Obama and Hassan Rouhani during the Iranian leader's recent visit to New York. And this is having positive repercussions on the rial, Iran's currency.

After 28 September, when the call became public knowledge, the rial, which traded at 32,000 to a dollar, dropped to 30,000 riyals. Although the gain is not huge, for most Iranians even a modest improvement in the rate is a promising sign, after years in which they feared a war because of their country's controversial nuclear program and looked with misgivings at a possible improvement of the economic situation.

The rial's positive outlook did not last long. A few days later, it became clear that expectations were too high and the rial stabilised after moderate gains. More recently though, Iran's currency has begun to improve again.

Negative reactions among hard-liners in Iran, including statements by Pasdaran leaders, cast a shadow on the hopes raised by the phone call. Statements by Obama during a meeting with Israeli Prime Minister Benjamin Netanyahu last week, about the options available to prevent Iran from having nuclear weapons, including military, had the same effect.

However, when Iran's Supreme Leader Ali Khamenei approved, albeit with some reservations, Rouhani's approach of openness towards the United States, the trend shifted again.

In fact, as those who bought foreign currencies in the last two years saw the opportunity to sell at a profit, investment advisers appear optimistic and are suggesting that market conditions may further improve, giving those who are willing to wait a chance to make greater profits.

 

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