Iran Rial Plunges as US Sanctions Loom

The Iranian rial has fallen to a new low as the US prepares to announce further sanctions, prompting Iranians to rush to currency exchanges.

The rial opened at about 2.02 million to one US dollar on Monday, leaving the currency worth roughly half its value at the beginning of the year.

The sharp decline has continued through nearly six months of war, adding to economic pressure on households across Iran. In Tehran, residents have been queuing at exchange markets to obtain US dollars before the Iran currency crisis deepens.

“There is no hope for a deal and peace,” Sadegh Mahmoudi, 73, told the Associated Press while waiting at an exchange office in central Tehran.

Food and other basic goods have also become significantly more expensive during the conflict. Years of Western sanctions and persistent inflation had already weakened the economy, while the war has added further pressure.

US Treasury Secretary Scott Bessent said the situation had become particularly severe.

“President Trump decimated Iran’s economy to a point where the rial has never been weaker and inflation has rarely been higher,” Bessent wrote in an opinion article published by the Financial Times on Sunday.

He also argued that Iran’s leadership was increasingly isolated.

“The regime’s final refuge now lies in the self-deception of fearful nations that still believe accommodating aggression can secure a durable peace,” he added.

Bessent has warned that further financial measures could effectively “collapse the regime”, while President Donald Trump has also threatened additional pressure.

“IRAN IS COMPLETELY COLLAPSING!!!” the president wrote on Truth Social.

The worsening Iran currency crisis has also raised concerns about the impact of international trade restrictions. The United Arab Emirates, Iran’s biggest trading partner, has suspended all trade with Tehran, according to the report.

Iranian officials have responded with warnings of possible retaliation if economic pressure escalates.

“Any escalation of this situation will undoubtedly bring about consequences,” Iranian Foreign Ministry spokesman Esmail Baghaei told reporters on Monday. “Our hands are not tied.”

For ordinary Iranians, the continuing fall in the Iranian rial means greater uncertainty over savings and purchasing power. With prices already rising and further US sanctions expected, pressure on the country’s economy could intensify in the coming weeks.

What impact do you think further US sanctions could have on Iran’s economy and the value of the rial?