$1 now costs 2 million rial: Iran's currency hits historic low amid fresh US sanctions

Iran's rial has hit a new record low. The currency fell to 2.02 million rial against the US dollar on Monday as Washington prepared to announce tougher sanctions on Tehran.

The fresh sanctions could put more pressure on an economy already battered by years of restrictions and the ongoing war.

The rial was trading at around 2 million to the dollar when informal currency markets opened on Monday.

The Central Bank's official rate was around 1.5 million rial to the dollar. But the informal rate is what most Iranians pay, according to The Associated Press.

The currency was already under pressure before the US and Israel attacked Iran on February 28.

Iran was dealing with double-digit inflation and negative growth even then. Nearly six months of war have pushed the economy further into trouble.

The latest fall came as the US prepared what it has described as an "economic D-Day" for Iran.

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US Treasury Secretary Scott Bessent has promised tougher sanctions. The measures are also expected to include secondary sanctions on countries that continue doing 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 in an opinion piece in the Financial Times on Sunday.

"The regime's final refuge now lies in the self-deception of fearful nations that still believe accommodating aggression can secure a durable peace."

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Strait Of Hormuz Standoff

The economic pressure has not yet forced Iran to give in to Washington.

Iran continues to maintain a firm grip on shipping through the Strait of Hormuz. About a fifth of the world’s traded oil passed freely through the waterway before the war.

Iranian attacks and threats have severely disrupted that traffic during the conflict.

Iran and Oman are reportedly close to an agreement on jointly managing the waterway. Regional officials said the plan would allow ships to enter the Persian Gulf through an Iranian-controlled route and leave through a route controlled by Oman.

Trump has criticised Oman, a US ally, over its role. He has even threatened to bomb the country if it "gets in the way." Oman’s foreign minister is due to visit Iran on Tuesday for fresh talks.