Iran's crumbling economy is the regime's greatest weakness with prices up 40% since the war began while authorities worry about making payroll | Fortune

"The rial has plunged 8% against the dollar on the black market since the war started, after losing 60% of its value in the months following the 12-day war against Israel last June."

"High inflation forced the central bank last month to issue its largest-ever currency denomination, the 10 million rial note, just a month after putting the 5 million rial into circulation."

"An insider close to the Iranian establishment said officials view the economy as the country's Achilles heel, with fears of renewed unrest looming over the government."

"Without an influx of funds, authorities will have trouble making payroll, eventually threatening the regime's ability to govern Iran, as the war has strained its financial resources."

The Iranian economy faced dire conditions before the war, with high inflation and currency collapse leading to protests. The ongoing conflict has worsened the situation, destroying infrastructure and increasing unemployment. The rial has lost significant value, and inflation rates have surged, with food prices skyrocketing. The central bank's response included issuing higher currency denominations. Officials recognize the economy as a critical vulnerability, fearing unrest. The failure to secure a ceasefire has hindered hopes for sanctions relief, complicating financial stability and governance.

Read at Fortune