Rising tensions in the Middle East have caused the Iranian currency, the rial (IRR), to fall to record lows against the dollar in the unofficial market, according to CNBC. The exchange rate reached 705,000 rials per dollar, according to data from the website Bonbast, which tracks the foreign exchange market. Currently, one rial is equivalent to about $0.000024.
The extreme drop in the value of the rial is the result of rocket and drone attacks against Israel. The attack was seen as a response to an alleged Israeli strike that killed several senior Iranian commanders in Damascus weeks ago.
Iran suffers trade restrictions and high inflation
The Iranian attack is Iran's first direct attack against Israel from Iranian territory. Iran is therefore at risk of further trade restrictions. Iran is already suffering enormous pressure caused by high inflation rates fueled by persistent US sanctions since the days of Donald Trump. According to Statista, Iranian inflation was a good 47 percent in 2023. Sanctions are affecting sales of some of Tehran's key exports, such as crude oil and petroleum products.
Iranian economic output is a fraction of Germany's
In 2023, the Iranian economy produced goods and services worth $366.44 billion (almost €340 billion). German GDP was 4,121 million euros in 2023.
Iran's most important exports include energy, carpets and agricultural products such as pistachios and saffron. There are also metals and minerals, as well as car parts.
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