Iran’s currency has dropped by 20 percent since March 10 when an agreement was signed with Saudi Arabia to restore relations, injecting optimism into the economy.

The rial was trading above 530,000 to the US dollar, and 570,000 to the euro Wednesday, as most offices and businesses are closed due to long Nowruz holidays.

When Tehran and Riyadh announced the Chinese-brokered deal to restore diplomatic relations earlier in the month, the rial rose to 440,000 to the dollar, as the deal was seen as a step toward reducing Iran’s international isolation.

However, the initial euphoria in Tehran has given way to more realistic expectations, that the agreement might not have been a major foreign policy shift to impact the economy.

The fact remains that the government is facing a very large deficit, by some estimates more than 50 percent of its budget, without any immediate outlook for a major domestic or international breakthrough. More regime insiders are criticizing the government for lack of a plan to deal with the crisis and mismanagement of the economy.

Iran needs to resolve its disputes with the United States to end crippling oil export and international banking sanctions, as its oil-based economy faces a serious hard currency shortfall.

Talks to resolve differences on Iran’s galloping nuclear program ended in a deadlock last September, with Washington blaming Tehran for intransigence. Since the failure, the Biden Administration has been saying that reaching a nuclear deal is not its priority any longer.