Iran's rial plunged to a record low on February 28 as Israeli and US strikes on Tehran sent the currency into freefall, with free market data showing the dollar trading at IRR1,749,500 ($1) as panic gripped financial markets following the attack on the capital.

The rate, sourced from Bonbast, which tracks Iran's free market exchange rates, marks a sharp deterioration from the IRR1,350,000 level seen at the start of January 2026.

The rial had already been under sustained pressure through February, breaching IRR1,600,000 in early February before climbing steadily to current levels as US-Iran nuclear talks in Geneva failed to produce a breakthrough and military tensions mounted.

The British pound was trading at IRR2,353,500, the euro at IRR2,067,500 and the Russian rouble at IRR22,650 on the free market as of 07:27 UTC on February 28, according to Bonbast data.

Gold reflected the same panic, with an ounce priced at $5,278.10 on international markets while domestic gold prices reached IRR224,504,820 per gram on the Tehran free market.

The rial's collapse accelerates a depreciation trend that has gathered pace since the reimposition of US sanctions following Washington's withdrawal from the 2015 nuclear deal.

Iran's currency has lost the vast majority of its value over the past decade, with inflation running at around 40% annually and the gap between the official and free market rates remaining wide.

The strikes on Tehran, which targeted areas near Supreme Leader Ayatollah Ali Khamenei's compound, triggered the immediate closure of Iran's airspace and the cutting of mobile phone services, compounding the shock to an economy already under severe strain from Western sanctions and domestic unrest.