Iran’s currency and stock markets witnessed significant downward pressures on Saturday amid the continuing Gaza war and the specter of a widening conflict.

The escalation of tensions between Tehran and Washington, combined with the start of a new phase of the Israeli ground offensive in Gaza, can have significant negative effects on various aspects of Iran’s economy.

The US dollar climbed to 520,000 rials on Saturday, up from slightly over 500,000 rials during the week. The increase came after a sharp rise on the first day of the conflict between Hamas and Israel when the dollar reached 530,000 rials. However, intervention by the central bank and market stabilization measures led to a slight recovery for the rial.

Iran’s currency has declined by more than 12-fold since 2018 when the United States withdrew from the JCPOA nuclear deal and imposed economic sanctions.

In addition to the currency market, the prices of various gold coins and gold also experienced a significant surge on Saturday. Each gold coin was priced at over 300 million rials, equivalent to nearly 600 US dollars, marking an increase of more than ten million rials compared to the previous week.

The Tehran Stock Exchange's main index faced a decline of 50,000 units, losing over 2.5% of its value and falling below the 2-million-unit mark.

The economic developments come in the wake of a decrease in retail trade and the continuous outflow of real capital from the market which indicated signs of a looming recession.

However, Ehsan Khandouzi, the Minister of Economy, attributed the economic developments to foreign media reports.