Iran's rial hit a record low on Monday as Washington prepared to announce new sanctions described by the administration as an "economic D-Day," which would intensify pressure on an economy already strained by prior sanctions and a U.S. naval blockade.
The currency fell to 2.02 million to the U.S. dollar when trading commenced in informal currency markets. While Iran's official Central Bank rate was around 1.5 million rial per dollar, the informal rate reflects what most Iranians pay.
The currency had already faced pressure before the U.S. and Israel attacked Iran on February 28, amid double-digit inflation and negative growth; however, new record lows have been reached as nearly six months of war have exacerbated the situation.
Despite this, U.S. President Donald Trump has not secured concessions from Iran, which maintains control over shipping through the Strait of Hormuz, a vital waterway that previously allowed one-fifth of the world's traded oil to pass freely before the conflict began. Iranian threats and attacks have significantly disrupted traffic during the war.
Iran and Oman, situated on opposite sides of the strait, are reportedly nearing an agreement for joint management of the waterway. Regional officials indicated this plan would allow ships to enter the Persian Gulf via an Iranian-controlled route and exit through an Omani-controlled route.
Trump has issued sharp criticism toward Oman, an American ally, threatening military action against the country if it "gets in the way."
Oman's foreign minister was scheduled to visit Iran on Tuesday for further discussions.
In an effort to resolve the deadlock with Iran, U.S. Treasury Secretary Scott Bessent announced that stronger sanctions than those currently in place would be unveiled Monday, including secondary sanctions targeting nations continuing business with Iran.
Bessent wrote in a Sunday opinion piece for the Financial Times, "President Trump decimated Iran’s economy to a point where the rial has never been weaker and inflation has rarely been higher. The regime’s final refuge now lies in the self-deception of fearful nations that still believe accommodating aggression can secure a durable peace."
Last week, the United Arab Emirates announced it was suspending all trade with Iran after Trump contacted UAE leader Sheikh Mohammed bin Zayed Al Nahyan the day prior to the announcement.
The UAE has historically been one of Iran's largest trading partners and its primary source of imports, in addition to being a major re-export and financial center for Iranian enterprises.
Following Bessent’s comments, Mohsen Rezaei, the hard-line leader of Iran’s Supreme National Security Council, stated on X that any country supporting new American economic measures would be considered an "act of war."