The Iranian rial has gained 15 percent since the victory of president-elect Hassan Rohani, who has said he will seek an easing of international sanctions in an effort to revive the economy.
The currency strengthened to 31,500 rial a dollar in unregulated trading shortly before markets closed yesterday, from 36,250 on June 13, the day before Rohani’s surprise first-round election victory, according to Daily Rates For Gold Coins and Foreign Currencies, a Facebook page used by businessmen based in Iran and abroad. Today is a public holiday in Iran and markets are closed.
Unlike President Mahmoud Ahmadinejad, who advocated a confrontational approach to Western nations, Rohani has said he will bring more transparency to Iran’s nuclear program in an effort to roll back some of the U.S. and European Union measures against the country, which cut oil exports and pushed inflation to 30 percent. The rial had lost more than half of its value against the dollar in the past year amid financial and energy sanctions.
With accelerating inflation eroding the value of savings in rial, Iranians had turned to dollars as a form of investment. Now they have started to reintroduce to the market the dollars stacked at home, amounting to some $20 billion according to Central Bank governor Mahmoud Bahmani, Tehran-based Shargh newspaper reported yesterday.
European Union foreign policy chief Catherine Ashton said today she hopes Iran’s new government will work with world powers on settling the dispute over its nuclear program.
“I really hope that we might see some progress,” Ashton, who represents United Nations Security Council powers plus Germany in nuclear talks with Iran, told reporters before an EU foreign ministers’ meeting in Luxembourg. “We’ve put some good confidence-building measures on the table.”
Iran and world powers failed to reach an accord during the last round of nuclear negotiations, which was held in Kazakhstan in April. Western diplomats complained that Iran failed to respond to a confidence-building proposal made six weeks ago that would ease some economic sanctions in exchange for Iran curbing its nuclear program.
Iran’s interlocutors are calling for a halt in enrichment of uranium to 20 percent purity. The Islamic republic says it needs the medium-enriched uranium for isotopes to treat cancer patients, while the U.S. and its allies say it may further enrich the uranium to create material to build nuclear weapons.