The Return of Trump: How It Impacts Iran’s Currency Market
Tuesday 21 Jan 2025The return of Donald Trump to the White House has already sent ripples through global markets, and Iran’s currency market is no exception. The above chart shows a notable rise in the exchange rate of the Canadian Dollar (CAD) to the Iranian Toman in recent days, peaking on January 21. This surge reflects growing uncertainties tied to Trump's anticipated policies and their potential global repercussions.
Trump’s Policies and Their Effect on Iran’s Currency
Trump's presidency is historically associated with stringent policies against Iran, including severe sanctions that heavily impacted the Iranian economy. These measures led to a significant devaluation of the Iranian Rial. His return to power has reignited fears of a similar trajectory, with the informal currency exchange market already showing a "green" board—indicating rising exchange rates.
Could Iran and the U.S. Resume Negotiations?
While heightened tensions dominate the landscape, the possibility of direct talks between Tehran and Washington remains unclear. Trump's previous "maximum pressure" campaign left little room for diplomacy. Unless a significant shift occurs in his administration's strategy, the odds of negotiations are slim. A breakthrough in talks, however, could stabilize or even strengthen the Iranian Rial against foreign currencies.
Forecast for Iran’s Currency Market
Further Depreciation: Continued sanctions or additional economic pressure could push the Rial to new lows.
Stabilization or Recovery: Any move toward easing tensions or resuming talks might provide relief to the market.
Conclusion
The currency fluctuations observed in Iran are a direct consequence of U.S. foreign policy shifts. As the chart indicates, recent days have seen a sharp increase in exchange rates, reflecting the market's reaction to Trump's leadership style and its implications for Iran. The future of the Iranian currency market hinges on the evolving political landscape and the possibility of renewed dialogue between the two nations.