Why Pakistanis rush to buy Iranian currency after US-Iran peace deal

The value of Iranian currency increased sharply in Pakistan’s open market after a memorandum of understanding was reached between the United States and Iran. The development reduced uncertainty and pushed up demand for Iranian rials.

According to market estimates, the value of 10 million Iranian rials increased by Rs2,000 to Rs3,000 within two days. The same amount of currency moved from around Rs3,500 to Rs4,500 in the local open market.

Exchange Companies Association of Pakistan Chairman Malik Bostan said Pakistani buyers purchased a total of 60 billion Iranian rials over the past 48 hours. He said the total value of these transactions was around Rs250 million.

He explained that demand for Iranian currency has increased again after a gap of nearly three months. According to him, most buyers belong to the lower and middle-income groups.

Malik Bostan said interest in Iranian currency had risen earlier after the US president announced a ceasefire. At that time, the price of 10 million Iranian rials, which had been selling for only a few hundred rupees, jumped to nearly Rs12,000.

He said the currency later lost value after Israeli and US attacks on Iran created fresh uncertainty. Until two days ago, the value of 10 million Iranian rials had fallen back to between Rs2,000 and Rs3,000.

Also read: Five Iranian ships pass Strait of Hormuz after US blockade lift

However, renewed hopes of improved relations between Washington and Tehran have increased demand once again. As a result, the value of Iranian currency has started rising in the local market.

Malik Bostan advised investors to remain cautious while buying Iranian currency. He said only a memorandum of understanding has been signed so far and market volatility may continue until a final agreement is reached.

He added that the real value of the Iranian currency will become clearer after a formal agreement is signed between the two countries. Until then, sharp fluctuations and speculative trading cannot be ruled out.

The recent rise in Iranian currency shows how quickly political developments can affect exchange markets. Even early signs of improved relations between countries can change investor sentiment.

However, the market remains uncertain because no final agreement has been signed yet. Experts believe the value of the Iranian rial may continue to move up and down in the coming weeks.