Iranian rial gains ground in Pakistan market during conflict, dealers say

KARACHI: Currency dealers say the Iranian rial has strengthened during the conflict and demand for the currency remains elevated in Pakistan’s market.

Before the war, which began on Feb 28, the rial was barely seen as a tradable currency, with 10 million rials available for only Rs2,500. They said the conflict altered sentiment among people involved in currency buying, contributing to a more positive outlook toward the Iranian currency.

Dealers also said trade with Iran has expanded during the war, increasing demand for the rial. A two-week ceasefire between the United States and Iran, brokered by Pakistan, is currently in place and is due to end on April 21.

Trade activity and investor interest

Currency market participants say both commercial activity and speculative buying have supported the rial. Exchange Companies Association of Pakistan Chairman Malik Bostan said there are two categories of buyers in the market. Traders are purchasing since the volume of merchandise deals has increased while the ambitious investors anticipate yielding huge profits with higher prices of the Iranian rial in future,

Bostan said the Iranian rial is currently available at Rs10,000 per 10 million, which he described as four times its pre-war level. He added that trading in the currency has risen sharply.

He said exporters are accepting Iranian rials in exchange for goods sold to Iran and then offloading the currency in the local market, while importers are purchasing rial for imports from the neighbouring country.

Trade targets and official engagement

Pakistan and Iran have maintained trade ties for years, although the volume of bilateral trade is not reflected in official documents. Current trade between the two countries was put at around $3 billion, while Iran is seeking to increase food and essential goods trade from $1.3bn to $3bn.

In a post dated Sept 17, 2025, Deputy Prime Minister Mohammad Ishaq Dar said he chaired an inter-ministerial meeting on Pakistan-Iran relations and reaffirmed Pakistan’s commitment to broadening bilateral engagement with Iran in priority sectors. Both countries are aiming to raise bilateral trade to $10bn by 2028.

Iran exported goods worth about $2.423bn to Pakistan during March 2024 to March 2025, while imports from Pakistan were recorded at $706 million.

Uncertainty remains

Some experts, however, said the outlook has shifted because of the war, which continues to cast a shadow over the region. They said trade with Iran and the future direction of the rial will remain uncertain unless the conflict comes to an end.

Dealers also pointed to media reports suggesting Tehran had managed to sell 30 per cent more oil, which they said signalled that the rial could strengthen further if the war ends permanently.