The Iranian currency, rial, fell to 2.02 million against the United States Dollar (USD) today, on 24 August, as Washington prepared to announce new sanctions that it said would be an “economic D-Day”, according to an AP report.
The sanctions aim to add pressure to an Iranian economy already stressed by previous measures and a US naval blockade, it added.
“Our objective is to sever every economic lifeline that sustains the tyrannical regime until Tehran stands alone,” US Treasury Secretary Scott Bessent wrote in the Financial Times early today, warning that an “economic D-Day” would begin at dawn, as per a Bloomberg report.
Trading on informal currency markets showed the rial down to 2.02 million to the USD. While the country's central bank rate was near 1.5 million rial to the dollar, most common Iranians pay the informal rate, the AP report added.
Meanwhile, Bloomberg cited data from tracking website Bonbast to report that the rial was down 4.5% on Monday — at an all-time low against the dollar, since Trump's announcement of a “crushing economic operation” against Tehran last week.
The Iranian economy is facing double-digit inflation, negative growth and hit new record lows amid the close to six months of war from the US and Israel that began on 28 February this year. Notably, despite the distress, US President Donald Trump has not been able to wrangle a deal with Iran, which has kept firm grip on the Strait of Hormuz. The waterway is key, as it is used to transport a fifth of the world’s traded oil, the AP report added.
The Bloomberg report added that Central Bank Governor, Abdolnaser Hemmati last week said that Iran's crude exports have “virtually stopped”. It added that this came after the United Arab Emirates suspended all financial transactions with Tehran last week till further notice. The UAE is Iran's biggest trading partner.
Iran’s top financial newspaper, Donya-e Eqtesad, said the currency’s drop was driven by disruption to foreign-exchange transfers and falling exports dovetailing with increased import demand and rising inflationary expectations.
Iran’s Foreign Minister on Monday indicated that Tehran would double down on trade with Chinese-aligned partners in order to resist the US pressure. On its part, China, which buys most of Iran’s oil, said US economic pressure wouldn’t work and called for a diplomatic solution to the war, the report added.
“We believe that structures such as the Shanghai Cooperation Organisation (SCO) and the BRICS group are effective instruments for breaking the monopoly of power and moving toward a fairer international order. Iran is determined to make the most of these opportunities,” Abbas Araghchi wrote in an op-ed in the state-run Ettela’at newspaper.
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