Iranian Rial Hits Record Low as US Prepares New Sanctions on Tehran

The value of Iran's rial currency has hit a new record low, reaching 2.02 million to one U.S. dollar as trading opened on August 24. This comes as Washington prepares to announce additional sanctions that would further pressure the country's already struggling economy.

Before the conflict began in February, the rial was under significant pressure due to double-digit inflation and negative growth. Since then, prices of daily staples such as rice have increased by over 60%, while beef prices are up more than 150%.

The International Monetary Fund forecasts that Iran's GDP will contract by over 5%. However, the country retains a strategic advantage in its ability to disrupt global trade through the Strait of Hormuz, which has brought traffic to a near standstill and put pressure on U.S. President Donald Trump ahead of congressional elections.

The war has devolved into a dispute over control of the strait, with Iran refusing to fully reopen it unless it can charge ships. In an attempt to break the impasse, Trump's administration has promised stronger sanctions, including secondary measures against countries that continue to do business with Iran.