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What will lifting sanctions do to Iran's rial?

The removal of sanctions will likely substantially strengthen the rial and could lead to a wave of cheap and wasteful imports into Iran, economists have warned.
EDITORS' NOTE: Reuters and other foreign media are subject to Iranian restrictions on leaving the office to report, film or take pictures in Tehran.

A money changer waits for customers in Tehran's business district January 7, 2012. REUTERS/Raheb Homavandi  (IRAN - Tags: BUSINESS) - RTR2VZCM

If economic sanctions against Tehran are lifted, the flow of $130 billion worth of Iran’s blocked funds coupled with billions of dollars in possible foreign direct investment into the $370 billion economy could be disastrous if a proper currency policy is not adopted.

Farhad Nili, head of the Monetary and Banking Research Institute, noted earlier this week that sanctions have left Iran with "compulsory savings" abroad, an opportunity that he said "must be seized in a best way."

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