In recent weeks, an unusual trend has quietly surfaced in local discussions and informal markets: some individuals in Pakistan are showing interest in buying the Iranian rial, not for trade or travel, but in the hope that its value may rise in the future. This curiosity is not random; it is rooted in expectations surrounding the possible second round of US-Iran peace talks. The logic seems simple: if an agreement is reached and sanctions are lifted, Iran’s economy could recover, and its currency might strengthen. But this raises a chain of deeper and more important questions. Will the US and Iran actually reach an agreement this time? If they do, will sanctions truly be lifted? Why is the value of the Iranian rial so closely tied to sanctions? And why are some people in Pakistan quietly trying to buy Iranian rials and hold them for future profit? Is this even legal in Pakistan? And if such behavior spreads, could it have any impact on Pakistan’s already fragile economy?
To understand this situation, one must look at how sanctions have shaped Iran’s economic reality. Since the United States withdrew from the Joint Comprehensive Plan of Action in 2018, Iran has faced strict economic restrictions on its oil exports, banking system, and access to global financial markets. The results are clear in the data. The Iranian rial has lost more than 90 percent of its value over the past decade, while inflation has remained persistently high, often crossing 40 percent. A weak currency in such a case is not surprising; it reflects reduced demand, lower foreign exchange inflows, and declining confidence in the economy.
Any buying and selling of Iranian rials is likely happening outside formal systems, which raises concerns about legality, transparency, and risk.
This is where expectations begin to influence behavior beyond Iran’s borders. If there is even a possibility that sanctions could be lifted, economic logic suggests that Iran’s oil exports would recover, foreign reserves would increase, and confidence in the economy would improve. In such a case, the rial could appreciate. For some individuals, this creates a speculative opportunity: buy the currency when it is weak and sell it later if it strengthens. This expectation appears to be quietly driving some people in Pakistan to look at the Iranian rial as a potential investment.
However, this expectation is built on uncertainty. Negotiations between the US and Iran have always been complex and difficult. While both sides have incentives to reach an agreement, the US seeks stability in the region, and Iran seeks economic relief, their demands often remain far apart. Issues such as nuclear limits, inspections, and regional influence continue to create obstacles. Even if a deal is reached, sanctions are rarely lifted immediately. They are usually removed in phases, depending on compliance. There is also the possibility that political changes in either country could reverse any progress, as has happened in the past. This makes any expectation of a strong and quick recovery of the rial highly uncertain.
The legal position in Pakistan adds another layer of complexity. Foreign exchange transactions are regulated by the State Bank of Pakistan, which allows individuals to hold certain foreign currencies through official channels. However, dealing in currencies of heavily sanctioned countries, such as Iran, is not straightforward. Formal financial institutions in Pakistan generally avoid such transactions to remain compliant with international regulations and avoid penalties. This suggests that any buying and selling of Iranian rials is likely happening outside formal systems, which raises concerns about legality, transparency, and risk. In informal markets, individuals have little protection against fraud or loss.
From an economic perspective, holding Iranian rials is not a typical investment decision. Unlike major currencies such as the US dollar, the rial is not freely traded in global markets. Its value depends heavily on political developments rather than stable economic fundamentals. Even if sanctions are lifted, Iran still faces structural economic challenges, including inflation, governance issues, and external uncertainties, which could limit any sustained appreciation of its currency. This makes such speculation highly risky.
There is also a broader economic concern for Pakistan. If more individuals begin to engage in such speculative behavior, it reflects a lack of confidence in domestic investment opportunities. Instead of investing in local businesses or financial markets, people start looking for gains in uncertain external options. This can lead to small but meaningful capital outflows and add pressure on Pakistan’s foreign exchange environment. It may also attract regulatory attention, potentially leading to stricter controls that could affect legitimate financial activities.
What this broader discussion highlights is how expectations rooted in global politics are increasingly shaping local economic choices. A possible diplomatic outcome between two distant countries is already influencing financial thinking in Pakistan. It reflects a deeper reality of today’s interconnected economy, where markets often respond not just to actual policy changes but to the anticipation of them.
In the end, the outcome of the US-Iran talks remains uncertain. A deal may be reached, or it may fail like previous attempts. Sanctions may be lifted partially, fully, or not at all. The Iranian rial may recover, or it may remain weak due to deeper economic problems. For those quietly investing in it, the risks are significant. For Pakistan, the lesson is clear: speculation driven by uncertain geopolitical developments should be approached with caution, because what appears to be an opportunity today may turn into a financial loss tomorrow.
The writer is an independent researcher and can be reached at abdulniner09 @gmail.com