Iranian rial gets a boost as sanctions lifted
KARACHI: The Iranian rial has surged in value after the lifting of international sanctions against Tehran, with speculators and investors hoping that the currency could turn returns like the Kuwaiti dinar did in the early 1990s after that country regained independence from Iraq.
Currency dealers said that the value of 10 million Iranian rials has jumped from Rs32,000 before the lifting of sanctions to Rs50,000 now.
Iraq captured Kuwait in 1990 which eroded the value of the Kuwaiti dinar. During the subsequent two to three years the currency incurred loss to its holders, but those who were patient and chose to hold it were lucky. In Karachi, many made fortunes as the dinar later shot up more than hundred times in value.
It is estimated that Iran stands to recover $100 billion from frozen assets scattered across the world, including China, India, Japan, South Korea, Turkey, and also reportedly in Taiwan. These countries were buyers of Iranian oil.
Iran hasn’t been able to access the roughly $100 billion sitting in those banks because of sanctions imposed by the US in 2012.
Currency dealers believe that as Iran starts to pump 5m barrels of oil per day into the market after the lifting of sanctions, the Iranian rial is set to get a boost from the inflow of dollars.
Published in Dawn, January 24th, 2016
