Dubai: Iran’s currency fell below the psychologically significant threshold of 1,000,000 rials per US dollar on Tuesday, as market participants foresee no end to the sanctions imposed under US President Donald Trump’s renewed “maximum pressure” campaign.
President Trump earlier this month disclosed that he had sent a letter to Iran’s Supreme Leader Ayatollah Ali Khamenei, warning that Iran’s nuclear program would be addressed either through negotiations or military intervention.
Ayatollah Khamenei dismissed the US offer for talks as “deceptive,” and Iranian Foreign Minister Abbas Araqchi stated last week that negotiations with Washington were untenable unless its policy shifted.
The apparent diplomatic impasse has heightened concerns of potential conflict, although Iranian officials have attempted to allay these fears. “I am certain there won’t be any war, as we are fully prepared for such a condition… so that no one will contemplate attacking Iran,” Araqchi said on Monday during a meeting with the Iranian Red Crescent.
The Iranian rial plummeted to a record low of 1,039,000 rials per US dollar, according to Bonbast.com, which aggregates live data from Iranian exchanges.
This represents a depreciation of more than half of the currency’s value since President Masoud Pezeshkian assumed office last year.
Faced with an annual inflation rate of approximately 40 percent, Iranians are seeking safe havens for their savings by purchasing dollars, other hard currencies, or gold, indicating further downward pressure on the rial.
The Iranian rial was valued at around 55,000 per US dollar in 2018, when the Trump administration reinstated US sanctions to compel Tehran to the negotiating table by curtailing its oil exports and access to foreign currency. The US has implemented four rounds of sanctions on Iran’s oil sales since Trump’s return to the White House.
