Relative Decrease in Tension in Iran's Currency Market Two Days After Israel's Heavy Strike on Hezbollah

While the currency price in Iran had been fluctuating around 59,000 tomans in recent months, it increased with the escalation of regional tensions starting from the evening of Friday, October 6. Recently, news of Rafael Grossi, the Director General of the International Atomic Energy Agency, visiting Tehran and the possibility of resuming negotiations on the JCPOA had stabilized the dollar rate in the first week of October, but the increase in tensions in the Middle East changed the currency rate trend. Among these events was Israel's heavy attack on Hezbollah's command center in the heart of the 'Dahiyeh' area, in southern Beirut, which agitated Iran's financial markets, causing the free dollar price to reach 60,650 tomans by Saturday morning. Shortly after, with the confirmation of the death of Hezbollah's Secretary-General and the Deputy Commander of the Islamic Revolutionary Guard Corps' operations during this Israeli attack, the dollar rate exceeded 61,000 tomans. On Saturday, October 7, the price of one US dollar in the free market of Iran was traded at 61,300 tomans, the highest figure in the past two months. The price of gold coins also increased by over one million tomans, approaching 48 million tomans, and the price of 18-carat gold exceeded four million tomans. However, by early Sunday, the dollar price slightly decreased to around 60,350 tomans, still above the 59,000 tomans range of recent months. The dollar rate in Iran's free market has increased by about four percent since the widespread explosion of pagers used by Hezbollah in late September and the start of severe Israeli attacks on positions and headquarters of this Iran-supported group. Previously, following the death of Ismail Haniyeh, the head of Hamas's political bureau during a visit to Tehran on July 31, the dollar rate peaked at 61,500 tomans. At that time, the Islamic Republic promised 'severe revenge' against Israel, but has so far postponed the execution of this promise. The Tehran Stock Exchange index also saw a drop of eight thousand units on Saturday. The prices of various coins surged between 2.5 to 4.2 percent, with the price of Imam coin setting a historical record, surpassing 47 million 700 thousand tomans. Unlike the past, Islamic Republic officials have refrained from threatening Israel with military retaliation in response to the death of Hezbollah's Secretary-General and the Deputy Commander of the IRGC's operations. In contrast to Iran, recent Israeli attacks on Lebanon have not significantly changed the value of the Lebanese pound, which remains around 90,000 pounds to the US dollar. The Lebanese pound has lost 98 percent of its value since the beginning of last year due to the economic crisis in the country. The Iranian rial has also lost about 93 percent of its value since 2018 and is currently known as 'the least valuable currency in the world.'