Iran's national currency, the rial, hit a record low against the U.S. dollar on Monday, trading at 2.02 million to the dollar on informal markets. This comes as the U.S. prepares to announce new sanctions intended to increase pressure on the Iranian economy, which has already been impacted by previous sanctions and ongoing regional instability.
U.S. Treasury Secretary Scott Bessent described the upcoming measures as an "economic D-Day" in an opinion piece published in the Financial Times. He stated that the sanctions would include secondary measures targeting countries that continue to conduct business with Iran. Bessent asserted that previous U.S. actions under President Donald Trump had severely weakened Iran's economy, leading to the rial's record low value and high inflation.
The Iranian rial had been under pressure prior to recent escalations, facing double-digit inflation and negative economic growth. However, its value has fallen further as nearly six months of conflict have taken a significant toll. Despite U.S. efforts to force concessions, Iran has maintained control over shipping through the Strait of Hormuz, a vital waterway for global oil transit. Iranian actions and threats have disrupted traffic through the strait during the conflict.
In a sign of shifting regional dynamics, the United Arab Emirates announced last week that it was suspending all trade with Iran. This move followed a call between Trump and the UAE's leader, Sheikh Mohammed bin Zayed Al Nahyan. The UAE has historically been a major trading partner for Iran and a key financial hub for Iranian businesses.
Meanwhile, Iran and Oman are reportedly nearing an agreement on joint management of the Strait of Hormuz. Regional officials have suggested this plan could involve ships entering the Persian Gulf via an Iranian-controlled route and exiting through one controlled by Oman. President Trump has publicly criticized Oman, an American ally, warning of potential military action if the country interferes.
In response to the anticipated U.S. sanctions, Mohsen Rezaei, the leader of Iran's Supreme National Security Council, posted on X that any country supporting the new U.S. economic measures would be considered an "act of war."