Iran's rial currency hits new record low as US prepares to announce more sanctions

Iran's rial currency plummeted to an all-time low on Monday as the United States prepared to impose additional sanctions, dubbed an "economic D-Day." The rial plummeted to 2.02 million to the US dollar on informal markets, while the official rate stood at approximately 1.5 million rial per dollar. The currency had been under strain due to previous sanctions and a US naval blockade, with double-digit inflation and a shrinking economy.

However, the situation worsened following the US and Israel's attack on Iran on February 28, as the prolonged conflict exacerbated inflation and economic decline.

Despite US President Donald Trump's failure to secure concessions from Iran, the nation persists in controlling shipping through the Strait of Hormuz, a critical waterway responsible for a fifth of the world's traded oil before the war commenced. Iran and Oman, situated on opposite sides of the strait, are reportedly nearing an agreement for shared management of the waterway, which would involve ships passing through an Iranian-controlled route to enter the Persian Gulf and an Oman-controlled route for exit.

US President Trump has harshly criticized Oman, a US ally, threatening military action if the country interferes. Oman's foreign minister is set to visit Iran on Tuesday for further discussions. In an effort to disentangle the impasse with Iran, US Treasury Secretary Scott Bessent announced that stronger sanctions would be imposed, surpassing those already in effect.

Bessent's comments, published in the Financial Times on Sunday, stated that President Trump had weakened Iran's economy to the point where the rial had never been weaker, and inflation had never been higher. The regime's only remaining option, Bessent argued, was to deceive fearful nations into believing that accommodating aggression would lead to a stable peace.

In the meantime, the United Arab Emirates (UAE) announced that it would suspend all trade with Iran, following a call from President Trump to UAE leader Sheikh Mohammed bin Zayed Al Nahyan earlier that day. The UAE, a significant trading partner for Iran and a major re-export and financial hub for Iranian businesses, has been one of the nation's largest import sources.

Following Bessent's announcement, hard-line Iranian leader Mohsen Rezaei of Iran's Supreme National Security Council declared in an X post that any country's support for new American economic measures would be considered an "act of war."