The value of Iran's rial is falling with no floor in sight as the country, already under heavy U.S. economic sanctions, braces for what Washington has dubbed an "economic D-Day." Prices have doubled amid broad economic turmoil.
The rial fell to as low as 2.02 million per dollar on the unofficial foreign exchange market as soon as it opened on the 24th local time, setting yet another record low. Iran's central bank posts an official rate of about 1.5 million rial per dollar, but most Iranians deal at the unofficial market rate.
The rial had already been weakening amid double-digit inflation and negative growth even before the U.S. and Israeli strikes on Feb. 28. The war, now nearly six months long, has poured fuel on the decline.
Kitchen Tables Hit First
Soaring prices have already changed daily life for Iranians. According to the Associated Press, rice prices at Iranian supermarkets have risen 60% and beef prices more than 150% since the war began.
A taxi driver in Tehran said working 15 hours a day has not improved his situation, adding, "I've given up fruit, protein and leisure, and now I work weekends too." A woman in her 40s complained that she buys milk, eggs and toilet paper while giving up meat entirely, yet still paid 890,000 rial (about $65).
According to Al Jazeera, one Tehran market vendor said rice that cost 1.8 million rial per kilogram a year ago now exceeds 5 million rial. The International Monetary Fund (IMF) has forecast that Iran's gross domestic product will shrink by more than 5% this year.
Even amid this economic collapse, U.S. President Donald Trump has extracted no meaningful concessions from Iran. Tehran still holds a firm grip on the Strait of Hormuz, a key waterway through which one-fifth of the world's crude oil traffic passed before the war. Iran's repeated attacks and threats during the conflict have severely disrupted passage through the strait.
Iran is reported to have reached the final stage of negotiations with Oman, another coastal state along the Strait of Hormuz, on a plan to jointly manage the strait. The most likely arrangement would have vessels use a route controlled by Iran when entering the Persian Gulf and by Oman when leaving.
Trump strongly pressured Oman during the talks, going so far as to say he would bomb the country if it obstructed the United States. Oman's foreign minister is scheduled to visit Iran on the 25th for fresh talks, drawing attention to the outcome.
U.S. Treasury Secretary Scott Bessent pledged to announce far stronger sanctions than before on the same day to break the deadlock with Iran. The measures are expected to include secondary boycotts targeting even third countries that continue to trade with Iran.
The United Arab Emirates (UAE) already announced last week that it would halt all trade and financial transactions with Iran. Trump is reported to have spoken directly with UAE President Mohamed bin Zayed Al Nahyan the day before the announcement.
Iran responded immediately. Esmaeil Baghaei, spokesman for Iran's Foreign Ministry, warned that "any action that worsens the situation will undoubtedly come at a cost," adding, "We are by no means standing idly by."
