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

Iran’s currency hit a record low Monday as Washington prepared to announce new sanctions it said would be an “economic D-Day” and would add further pressure on an economy already battered by previous sanctions and a US naval blockade.

The rial dropped to 2.02 million to the US dollar as trading opened on informal currency markets. Iran’s official Central Bank rate stood at around 1.5 million rial to the dollar, but the informal rate is what most Iranians pay.

The currency had already been under pressure before the US and Israel attacked Iran on February 28, with double-digit inflation and negative growth, but has been hitting new record lows as nearly six months of war have taken an even greater toll.

Still, US President Donald Trump has been unable to win concessions from Iran, which continues to keep a firm grip on shipping through the Strait of Hormuz, the key waterway through which a fifth of the world’s traded oil transited freely before the war began. Iranian attacks and threats have severely hampered that traffic during the war.

Iran and Oman, which is on the opposite side of the strait, are reportedly in the final stages of agreeing upon a plan for joint management of the waterway, which regional officials have said would include having ships to enter the Persian Gulf through an Iranian-controlled route and exit through a route controlled by Oman.

Trump has been sharply critical of Oman, an American ally, threatening to bomb the country if it “gets in the way.”

Oman’s foreign minister was to visit Iran on Tuesday for new talks.

In an attempt to break the impasse with Iran, US Treasury Secretary Scott Bessent promised even stronger sanctions than those already in place would be announced Monday, including secondary sanctions on countries that continue to do business with Iran.

“President Trump decimated Iran’s economy to a point where the rial has never been weaker and inflation has rarely been higher,” Bessent wrote Sunday in an opinion piece in the Financial Times. “The regime’s final refuge now lies in the self-deception of fearful nations that still believe accommodating aggression can secure a durable peace.”

Already last week, the United Arab Emirates announced that it was suspending all trade with Iran. Trump had called the leader of the UAE, Sheikh Mohammed bin Zayed Al Nahyan, the day before the announcement.

The UAE has long been one of Iran’s largest trading partners and its biggest source of imports, as well as a major re-export and financial hub for Iranian businesses.

Following Bessent’s remarks, Mohsen Rezaei, the hard-line leader of Iran’s Supreme National Security Council, said in a post on X that any country’s support for new American economic measures would be seen as an “act of war.”