Iranian currency demand soars in Pakistan's market

KARACHI: Demand for Iranian currency has rebounded sharply in Pakistan’s open market, resulting in a notable rise in its value.

After the United States and Iran reached an agreement to end hostilities in the Middle East, easing concerns over global oil prices, the price of 10 million Iranian rials increased by Rs2,000-3,000, reaching between Rs3,500 and Rs4,500 in the local market.

Exchange Companies Association of Pakistan (ECAP) Chairman Malik Bostan said Pakistanis purchased around 60 billion Iranian rials over the past two days, amounting to nearly Rs250 million.

He noted that demand for the currency had returned after almost three months, with most buyers coming from lower-middle-income groups.

Bostan explained that about two and a half months ago, demand for Iranian rials surged following a ceasefire announcement by the US president, driving the value of 10 million rials from a few hundred rupees to nearly Rs12,000.

However, subsequent Israeli and US military strikes on Iran caused the currency’s value to plunge, with 10 million rials trading between Rs2,000 and Rs3,000 just days ago.

In recent days, renewed buying activity has helped the rial recover some of its losses. Bostan urged investors to remain cautious, pointing out that only a preliminary agreement has been reached between Washington and Tehran. He warned that speculative trading and market volatility could continue until a final deal is formally signed.

He added that the true market value of the Iranian currency would become clearer once the United States and Iran conclude and implement a comprehensive agreement.