Iran's Rial Gains After Trump Dials Back Escalated Rhetoric

(Bloomberg) -- Iran’s rial rebounded from a series of record lows on Tuesday, after President Donald Trump said he would talk to Iran without preconditions and Iranian officials appeared not to immediately dismiss the idea.

The dollar was trading at around 104,000 rials on the black market in late afternoon, from around 117,000 rials the day before, the semi-official Iranian Students’ News Agency reported, citing traders in Tehran.

Trump on Monday toned down the heightened rhetoric that has characterized exchanges between Tehran and Washington since the U.S. withdrew from an international nuclear pact with Iran in May. The U.S. president said he’d be willing to meet his Iranian counterpart, Hassan Rouhani, and other Iranian leaders without preconditions “anytime they want to.”

U.S. officials later appeared to walk back those comments, saying Iran must downgrade its military ambitions and involvement in regional affairs for talks to talk place.

Still, a top Iranian cleric said his country shouldn’t immediately reject Trump’s proposal. Ali Akbar Nategh Nouri, a conservative member of an administrative body that advises the Supreme Leader Ayatollah Ali Khamenei, characterized Trump’s statement as “his usual antics” but said that the Supreme National Security Council should assess the matter, according to the state-run Islamic Republic News Agency.

In their reports, ISNA and the semi-official Tasnim News agency said the stronger rial was due to a government currency package announced on Monday evening.

But analysts and currency traders said sentiment had been buoyed by Trump’s comments.

“Recent tensions have really led people to worry about an escalation and that seems to have eased off a little today,” said Massoud Gholampour, an analyst at Novin Investment Bank in Tehran.

“It’s the idea of talks and the possibility that the rial could stabilize at a lower rate,” said Khosrow Abdi, who sells foreign currency on the streets of downtown Tehran.

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