Rial Collapses Amid US Sanctions Threats
The Iranian rial has hit a record low of 2.02 million to one US dollar, as Washington prepares to announce new sanctions that will further pressure an economy already battered by previous sanctions and a US naval blockade.
The currency had been under pressure before the recent conflict with the US and Israel on February 28, but has repeatedly hit new lows in the past six months due to the ongoing war.
Iran's official Central Bank rate stands at around 1.5 million rials to one dollar, but the market rate is what most Iranians pay. The war has led to double-digit inflation and negative growth, with prices of daily staples such as rice increasing by 60% and beef prices rising over 150%.
The International Monetary Fund forecasts that Iran's GDP will contract more than 5%. Despite the economic pressure, Iranian officials claim they are not yet feeling political pressure. However, there are reports that Oman and Iran are working on a plan for joint management of the Strait of Hormuz, which would allow ships to pass through the waterway.