Iranian currency plunges to record low against dollar after strikes on Israel

Iran’s currency, the rial, briefly plunged to a record low against the dollar on the unofficial market, after Tehran launched an expansive missile and drone attack on Israel on Saturday night, exacerbating tensions in the Middle East.

The exchange rate was at 705,000 rials / USD on the open market around 10:30 a.m. local time on Sunday, according to data from foreign exchange monitoring site Bonbast. The Iranian currency has since pared some losses.

The government set an official exchange rate of 42,000 rials / USD in 2018.

The rial’s drop came hours after Iran deployed a massive drone and missile offensive against Israel Saturday night, in response to a suspected Israeli strike that killed several top Iranian commanders in Damascus earlier this month.

Israel said it identified 300 “threats of various types” and eliminated “99%” of those bound for Israeli soil as part of the Saturday attack, which allied U.S. leader Joe Biden described as “unprecedented” and “brazen.”

The development marked the first instance of a direct attack on Israel from Iranian territory, and Tehran now runs the risk of being hit with further trade and diplomatic restrictions.

Iran’s rial already faces pressures from sky-high inflation stoked by ongoing U.S. sanctions applied during Donald Trump’s administration, which have also diminished sales of some of Tehran’s key exports — crude and oil products.

Israel has called for an emergency meeting of the U.N. Security Council over the Saturday attack, while Biden has asked to convene the G7 on Sunday.