Why are Pakistanis buying Iranian rials in billions?

In Pakistan, Iranian rials has witnessed a major increase in open currency market, with different traders reported a hike in its local value over the past few weeks. 

According to Geo.tv, a standard bundle of 10 million Iranian rials (1 crore IRR) has risen from around Rs2,500 before recent regional developments to approximately Rs7,000–10,000 at present, marking a multiple-fold increase in value.

While asking, majority citizens claimed they are buying Iranian currency to support Iran’s economy, as the currency is weak, so if the purchasing of Iranian rials will increase, the currency will get a value globally.

As per currency dealers, the trend reflects heightened speculative activity as well as rising demand linked to cross-border trade with neighbouring Iran. The Iranian rial is currently available at Rs10,000 per 10 million. 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.

Investment in Iranian rial: boom or bust?

Pakistan Currency Exchange Company (Pvt) Limited (PCEC) Chairman Malik Muhammad Bostan stated: "Our people want to help Iran that's why Pakistanis are buying Iranian rials to make its currency strong globally. Approximately, 25 to 30 billion Iranian rials are sold on regular basis. Sometimes, this amount decreases and increases, relying on the situation."

If you have purchased Iranian rials, then this is for you that, Bostan said: "In the near future, if Iran plans to change their currency, banknotes, Pakistanis need to exchange the Iranian rials, as there's a cutoff date to exchange the currency." 

"If you miss it, you're then holding paper, not money," added Bostan, adding that currency reforms often happen overnight to prevent hoarding.

From where Pakistanis can get Iranian rials?

Federal Investigation Agency (FIA) Cyber Crime Wing (CBC) Deputy Director Fahad Khawaja said: "As per Foreign Exchange Regulation Act, 1947 (FERA), if any individual wants to purchase foreign currency, they can purchase it from the exchange company, which is registered under State Bank of Pakistan (SBP). Two individuals can't buy and sell the foreign currency from each other, as it's illegal in Pakistan.