Iran's currency, the rial, has dropped 3.3% in value since last week, when Israel launched strikes against Hezbollah in Lebanon, raising concerns about a broader conflict involving the Islamic Republic.

The rial was trading at 612,000 to the US dollar on Saturday, compared with 592,000 on September 20, when Hezbollah began to suffer mass casualties as a result of exploding pagers and walkie-talkies. As Israeli air strikes intensified in Lebanon earlier this week and culminated in the reported killing of Hezbollah leader, Hassan Nasrallah, the rial dipped further.

Since 2018, when the US withdrew from the JCPOA nuclear deal and imposed sanctions on Iran’s oil exports and international banking, the rial has lost 15 times its value. In the past three years alone, it has depreciated by 50%.

This sharp devaluation has coincided with soaring inflation, now hovering between 40-50%, pushing tens of millions of Iranians into poverty and creating a potentially volatile public mood.

The Iranian government has been quietly signaling an interest in new negotiations with the West this month to reduce sanctions, but so far, the US and its European allies maintain that only a genuine change in behavior will lead to talks."