TEHRAN, Iran (AP) 鈥� Iran鈥檚 currency hit a record low Monday as Washington prepared to announce new sanctions it said would add further pressure on an by previous sanctions and a U.S. naval blockade.
The rial dropped to 2.02 million to the U.S. dollar as trading opened on currency markets. Iran鈥檚 official Central Bank rate stood at around 1.5 million rial to the dollar, but the market rate is what most Iranians pay.
The currency had already been under pressure before the U.S. and Israel , as Iran faced double-digit inflation and negative growth, but has repeatedly hit new lows as nearly six months of war have taken an even greater toll.
Iranians find daily staples increasingly unaffordable. Since the war began, rice is up some 60% and prices of beef are more than 150% higher. The International Monetary Fund forecasts that GDP will contract more than 5%.
Still, economic pressure has not yet translated into political pressure. Iran retains a : Its attacks and threats on ships in the have brought traffic in the vital waterway to a near halt, damaging the world economy and heaping pressure on U.S. President Donald Trump ahead of congressional elections.
The war, as a result, has devolved into a fight over who controls the strait, through which a fifth of the world鈥檚 traded oil transited before the conflict. Iran is now refusing to fully reopen it unless it can charge ships.
Iran and Oman, which is on the opposite side of the strait, are reportedly in the for joint management of the waterway. Oman鈥檚 foreign minister is set to visit Iran on Tuesday.
In an attempt to break the impasse, Trump’s administration than those already in place would be announced Monday, including secondary sanctions on countries that continue to do business with Iran.
Ahead of the announcement, Trump posted on social media that 鈥淚RAN IS COMPLETELY COLLAPSING!!!鈥�
鈥淧resident Trump decimated Iran鈥檚 economy to a point where the rial has never been weaker and inflation has rarely been higher,鈥� U.S. Treasury Secretary Scott Bessent wrote Sunday in an opinion piece in the Financial Times. 鈥淭he regime鈥檚 final refuge now lies in the self-deception of fearful nations that still believe accommodating aggression can secure a durable peace.鈥�
Already last week, the United Arab Emirates announced that it was with Iran. The UAE has long been one of Iran鈥檚 largest trading partners and its biggest source of imports.
Iranian Foreign Ministry spokesperson Esmail Baghaei told reporters in Tehran on Monday that 鈥渁ny escalation of this situation will undoubtedly bring about consequences.”
鈥淥ur hands are not tied,鈥� he added.
Pakistan, which played a key role in brokering a 60-day ceasefire in June, sent a high-level delegation to Iran on Monday to discuss ending the war, the military said.
In downtown Tehran, 73-year-old Sadegh Mahmoudi did not hold out hope for a resolution. He joined a line of about a dozen people to purchase U.S. dollars with his remaining savings to hedge against further declines.
鈥淭here is no hope for a deal and peace,鈥� he said.
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Rising reported from Dubai, United Arab Emirates. Associated Press writer Munir Ahmed in Islamabad contributed.
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