Iran’s rial has fallen 10 percent since early January as tensions have risen in the region, with concerns rising about possible hostilities with the US or Israel.

On Tuesday the US dollar rose to more than 550,000 rials, which means the Iranian currency has fallen 13-fold since 2018, when the United States exited the JCPOA nuclear deal and imposed sanctions on Iran’s oil exports and international banking.

The euro hit 600,000 rials and the British pound traded at 700,000 rials in Tehran's free currency market, which despite some official exchange rates, reflects real exchange rates.

Although during the Biden administration the sanctions have not been rigorously enforced and Iran has been able to somewhat recover its oil exports, the country’s financial situation remains precarious.

The rials fall quickened last week, when Iran fired ballistic missiles at targets in Iraq and Pakistan, claiming retaliation against Israel and terrorists. Pakistan retaliated by airstrikes on targets in Iran, raising concerns about some kind of war breaking out with neighbors, or with the United States and Israel. Already tensions were high because of Iran-backed Houthis attacking commercial vessels in the Red Sea.

The annual inflation rate is at least 50 percent, with rial’s fall signaling higher inflation in the months to come. Monthly salaries for workers are less than $200 a month, as inflation rises faster than salaries in a depressed economy. There have been work stoppages and protests in many sectors, including oil and gas production platforms and refineries. Many essential goods such as wheat and animal feed are imported and rial’s fall signals higher consumer prices.