This study employs the Markov-Switching model to investigate the impact of the pandemic on exchange rate volatility in Iran using daily data from February 19th, 2020, to March 15th, 2021. The results of our empirical analysis indicate that the COVID-19 crisis has had a significant positive effect on exchange rate fluctuations in both high and low-volatility regimes in Iran. Specifically, a 1% increase in COVID-19 patients in both regimes leads to a 0.256% and 0.163% increase in exchange rate volatility, respectively. Moreover, the expected duration of remaining in the high volatility regime is longer than that of the low regime. To address the increased exchange rate volatility triggered by the COVID-19 pandemic, a comprehensive strategy should involve continuous monitoring of the virus's impact, alongside measures like public health interventions and vaccination campaigns. The central bank should also focus on stabilizing exchange rates through interventions and reserve management. Promoting economic diversification, supporting businesses in managing exchange rate risks, fostering international cooperation, and establishing long-term plans that consider prolonged volatility are essential. Additionally, transparent communication about government policies is crucial to reduce market uncertainty during crises.