TEHRAN – Following the historic collapse of the Iranian rial against the US dollar two weeks ago, when the price of one dollar exceeded about 610,<> riyals in the parallel market, Tehran completed two agreements that constituted an important turning point to restore part of the value of the Iranian currency, as the reconciliation agreement between Tehran and Riyadh was able to compensate for some of the losses incurred by the Iranian rial in the last six months.

The agreement between Tehran and Riyadh prompted the Iranians to sell their dollar stocks in exchange shops, which led to a drop in the price of one dollar to 410,48 Iranian riyals within 500 hours after the issuance of the Iranian-Saudi-Chinese tripartite statement, at a time when the value of the riyal was equivalent to <>,<> against the dollar before Declaration of reconciliation.

Growing supply

The reconciliation agreement between Tehran and Riyadh has led to the disappearance of queues to buy US currency in front of exchange shops in Ferdowsi Square in central Tehran, while the number of people who want to sell US dollars on the parallel market has increased amid expectations of a decline in the exchange rate against the Iranian rial.

For his part, the Secretary-General of the Iranian Money Changers Syndicate, Kamran Soltanizadeh, attributed the decline in the dollar rate to the reluctance of speculators to buy the US currency and indicated that this led to the recovery of the Iranian riyal, and expected the Iranian currency to continue to rise in the coming days to reach the exchange rate below 300 thousand riyals against the dollar.


In press statements, Soltanizadeh pointed to the importance of the Iranian-Saudi agreement on the resumption of diplomatic relations within two months and its role in the rise in the value of the Iranian riyal, stressing that this agreement led to the demand of foreign currency holders to sell what they have, at a time when foreign exchange market activists refrained from buying, and then supply outweighed demand and the exchange rate fell in the parallel market.

In addition to the rise in the value of the Iranian currency against the dollar, the prices of the yellow metal witnessed a significant decline in Tehran, where a gram of gold (18 carat) reached one million and 976 thousand riyals after it was traded at 3 million riyals two weeks ago, at a time when the price of the euro fell to 453 thousand riyals, according to exchange offices in the center of the Iranian capital.

Diplomatic breakthrough

After a large segment of Iranian observers attributed the decline in the value of the national currency to the political stalemate in the nuclear file and tension in Iran's relations with the neighborhood, it found in the announcement of the Tehran and Riyadh consensus a contributing factor to the rise in the price of the Iranian riyal against foreign currencies.

In this context, Mohammad Hossein Seifallahi, editor-in-chief of economic affairs, for Iran's Mehr Agency, describes the improvement in the value of the Iranian currency as a sign of hope for Iranian markets in the face of positive developments in the political arena, explaining that if the agreement with the International Atomic Energy Agency removed the specter of international resolutions, the agreement to resume relations between Iran and Saudi Arabia heralds an imminent economic breakthrough.


Saif Allahi expected – in his interview with Al Jazeera Net – that the Iranian-Saudi agreement will be reflected in strengthening his country's trade relations with the Arab neighborhood.

The Iranian researcher also expected an increase in trade exchanges between Iran and Arab countries following the resumption of political relations between Iran and Saudi Arabia, stressing that reducing tension between the major oil countries in the region will raise Iran's chances of increasing its oil exports to China.

Petro-yuan System

For his part, economic affairs researcher Sohrab Rostami Kia stressed the importance of the Iranian-Saudi agreement in resolving political differences with Chinese mediation within the framework of Beijing's keenness to ensure energy security in the Middle East, stressing that China's partnership with Tehran and Riyadh will strengthen the "petro-yuan" system (pricing oil in yuan) in the next stage.

Rostami Kia explained – to Al Jazeera Net – that in light of the differences between Tehran and Washington on the one hand and the fierce competition between China and the United States on the other, Iran's accession to the "Petro-Yuan" system will enable Tehran to increase its oil exports to China and reduce its need for the US currency at the same time.

He concluded that putting aside Iran and Saudi Arabia paves the way for their accession to the BRICS economic group, explaining that if the BRICS Plus adopts a single currency, this will put an end to the dominance of the US dollar.