Iran's financial markets react to Rome talks with cautious optimism

Iran's financial markets reacted with a mix of caution and optimism in the wake of the latest round of nuclear talks with the US in Rome, a stark contrast to the dramatic response witnessed after the first round of negotiations in Muscat.

Both Tehran and Washington described Saturday's Rome talks as constructive, agreeing to resume technical-level discussions in Oman, a key mediator between the two sides, starting Wednesday, ahead of a planned high-level meeting in Muscat next week.

Speaking on Sunday, Iranian government spokeswoman Fatemeh Mohajerani said the ongoing indirect negotiations had been positive. Referring to the crippling sanctions that have paralyzed Iran’s economy, she said that Tehran would welcome any practical initiative aimed at their removal.

Rial strengthens, gold retreats

Amid growing anticipation of a potential breakthrough, the Iranian rial appreciated modestly on Monday, trading at around 830,000 per US dollar on the open market. This follows a rebound from a record low of 1,050,000 in late March and early April, with the rial rising to around 850,000 after the initial talks in Muscat.

However, gold coin prices, a popular hedge against economic uncertainty for Iranian households, fell over the weekend, though the decline was less pronounced compared to the previous week.

Iranian media has reported that unlike the wave of currency selling seen after the Muscat talks—when long lines of sellers formed and exchange rates plummeted—Iranians have responded more cautiously this time, adopting a “wait-and-see” approach to selling their dollar bills and gold coins.

Sohrab Ashrafi, a forex and gold market analyst, told Shargh there is a sense of hope, but not enough confidence to trigger a full market reversal.

Stock market rebounds after months of lull

The Tehran Stock Exchange (TSE) showed greater enthusiasm, with significant gains on Sunday.

​The main index, TEDPIX, surged past 3 million points on Saturday and closed at 3,077,925 on Sunday— with a 2.16% increase day on day — marking one of its strongest performances in recent months.

​“Continued positive momentum in the talks could sustain this rally,” a commentary in Donya-ye Eghtesad, a leading economic daily, said. “Even in the absence of an immediate agreement, reduced geopolitical tensions alone can buoy market sentiment.”

Public skepticism persists despite market gains

Despite cautious optimism in financial markets, many ordinary Iranians remain skeptical about whether the negotiations will improve their everyday lives.

“There is little hope that prices will fall or living conditions will improve,” said one viewer in a message to Iran International TV. “Even if sanctions are lifted, it will be the children of the elite who benefit, not ordinary people,” he added.

Iran’s economy has been at its worst since the founding of the Islamic Republic in 1979, at least one-third of Iranians now live below the poverty line, and trust in the government is at an all-time low, as was seen in the record low voter turnout to elections last year.

Some other viewers voiced broader discontent with the political system, saying the nuclear talks are more about preserving the government’s grip on power than delivering economic relief.

One citizen said: “The Islamic Republic has ruined the economy. Prices are high, imports are of poor quality, and corruption is rampant,” adding that real change would only come if the Islamic Republic was overthrown.