Iran's Rial Hits Record Low as US Prepares New Sanctions

Iran’s rial currency hit a new record low on Monday, falling to 2.02 million against the US dollar in informal currency markets.

Washington is preparing to announce new sanctions, described as an economic D-Day, to add further pressure on Iran's economy. The rial's official Central Bank rate stood at around 1.5 million rial to the dollar. The currency was already under pressure before the US and Israel attacked Iran on February 28, facing double-digit inflation and negative growth.

Nearly six months of war have taken a greater toll, pushing the rial to new record lows. Iranians find daily staples increasingly unaffordable, with rice up some 60% and beef prices more than 150% higher since the war began. The International Monetary Fund forecasts that Iran's GDP will contract more than 5%. US Treasury Secretary Scott Bessent wrote in the Financial Times that President Trump decimated Iran’s economy.

Despite economic pressure, the currency slide has not translated into the concessions US President Donald Trump seeks from Tehran. Iran maintains a firm grip over shipping through the Strait of Hormuz, a waterway through which a fifth of the world’s traded oil moved freely before the war. Iranian attacks and threats during the conflict have severely hampered traffic through the strait, bringing it to a near halt.

Iran is now refusing to fully reopen the strait unless it can charge ships. Iran and Oman are reportedly in the final stages of agreeing upon a plan for joint management of the waterway. The proposed arrangement would allow ships to enter the Persian Gulf through an Iranian-controlled route and leave through an Omani-controlled route.

Oman’s foreign minister is scheduled to travel to Iran on Tuesday for another round of talks. Trump has been sharply critical of Oman, threatening to bomb the American ally if it gets in the way. The Trump administration promised even stronger sanctions than those already in place would be announced Monday, including secondary sanctions on countries that continue to do business with Iran.