(Bloomberg) -- Iran’s currency strengthened to a five-month high against the dollar as Joe Biden prepared to take office with a plan to revive the 2015 nuclear deal and provide sanctions relief for the Islamic Republic.
The value of the U.S. dollar on Iran’s unregulated, open market was down to 228,000 rials on Wednesday -- giving the beleaguered rial a 17% gain against the greenback since Jan. 6, according to currency trading website Bonbast.com.
The rial has lost more than 70% of its value since May 2018, when outgoing U.S. President Donald Trump abandoned the nuclear accord and imposed tough sanctions on Iran’s economy.
Biden, who was vice president when the Obama administration negotiated the pact, has said he wants to rejoin it and remove the penalties, provided Iran returns to compliance.
His presidency also raises the possibility that Iranian oil payments trapped in overseas bank accounts will be released, easing Iran’s foreign currency supply crisis.
“Prospects for the repatriation of billions of dollars that belong to Iran from banks in South Korea and other countries, as well as prospects for sanctions waivers for oil exports, are driving the appreciation of the local currency,” said Maciej Wojtal, founder and chief investment officer of Amtelon Capital in Amsterdam.
Equities were up almost 3% after the head of Iran’s Securities Exchange Organization announced his resignation because of major fluctuations in the market on Tuesday.
Head of Iran’s Capital Market Regulator Resigns: IRNA
The Tehran Stock Exchange’s main index has dropped 42% since hitting record highs last summer, fueled by the weaker currency and a surge in new investors as people sought affordable assets.
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