February 18, 2022
The rial has made a startling recovery in recent weeks, wiping out almost all the losses since Ebrahim Raisi became president seven months ago.
Most of the analysis in Tehran attributes the improvement to a belief that the US and Iran will agree to revive the nuclear agreement soon.
The rial had been sinking ever since President Raisi took office. According to the Bonbast website, it took 255,000 rials to buy a dollar when he took office August 5.
The rial then proceeded to sink slowly to a low point on December 6, when a dollar cost 311,000 rials, a loss in value of a whopping 22 percent in just four months.
But the rial then began a progressive rise in value, reaching 257,300 rials to the dollar on February 20. That meant the rial was down in value by less than 1 percent from when Raisi was inaugurated.
The December 6 low was exactly one week after Iran returned to Vienna and re-joined the talks on reviving the Joint Comprehensive Plan of Action or nuclear agreement.
It isn’t known yet if the Central Bank has been pumping dollars into the market in an effort to boost the value of the rial. However, the regime has been using some coercive measures. On December 10, the Intelligence Ministry announced it had arrested five people it accused of destabilizing the foreign exchange market. It also said it had blocked “several hundred” bank accounts being used by illegal foreign currency traders.
Beyond coercion, stories have appeared repeatedly to the media since December asserting that Iran and South Korea are in talks that will soon result in unfreezing the billions of dollars locked up in South Korean banks as a result of US sanctions. The Koreans have indicated they are not thinking of unfreezing any of those funds, but that is not reported in Iran.