The Iranian currency has fallen noticeably in the past two days as the Palestinian Hamas unleashed a devastating attack on Israel early on Saturday.

The rial began to slightly fall late on Friday, before the attack, while the fall accelerated on Saturday. While for weeks the rial was hovering around 495,000 per US dollar, it broke through the 500,000 on Saturday and dropped to 515,000 on Sunday.

Iran is widely seen as supporting the militant Palestinian groups and specifically the attack launched on Saturday morning. Top Iranian officials and government media did not hide their glee at the initial success of the Hamas attack and expressed their outright support.

Israel has vowed punishing revenge against Hamas, but the prospect of escalation beyond the Palestinian territories, and possible military conflict with Iran is apparently increasing the demand for the US dollar and other major currencies in Tehran.

The rial has lost its value 12-fold since early 2018, when the United States withdrew from the JCPOA nuclear deal and imposed tough economic sanctions on Iran. This has made imports much more expensive and has led to very high inflation at around 50 percent for the past three years.

Some officials and media in Tehran have been warning that tens of millions of people have fallen into poverty because of persistent high inflation, and this in turn has seriously contributed to political instability. Widespread anti-regime protests in 2022 and 2023 are partly attributed to financial hardships ordinary citizens face.