Iran’s currency, the rial, hit a record low over 2.02 million to the U.S. dollar on Monday as the Trump administration prepared to unveil its “Economic D-Day” maximum sanctions against Tehran.
The rial has been declining steeply for quite some time as heavy inflation eats away at the Iranian economy.
The popular uprising in January — which the regime put down by savagely murdering thousands of its own people — was caused, in part, by the collapse of the rial to about 1.4 million against the U.S. dollar. At the beginning of Operation Epic Fury on February 28, the rial was trading at 1.53 million to the dollar.
Years of corruption and mismanagement, and Tehran’s penchant for funneling money to terrorist proxies across the Middle East instead of caring for its own people, had thoroughly squandered the financial windfall from former President Barack Obama’s nuclear deal in 2015. The Wuhan coronavirus pandemic dealt even more damage to an economy that had very little ability to absorb such punishment.
Various economists have estimated the damage to Iran’s economy from the first 40 days of Operation Epic Fury at up to $300 billion and some of the higher estimates come from Iran’s own spokesmen. Iran’s panicked shutdown of the Internet during the January uprising, which dragged on for months, did tremendous damage as well — possibly over $250 million a day.
Last week, Iranian central bank director Abdolnaser Hemmati said that Iran’s oil exports have effectively “fallen to zero” due to the U.S. blockade. With the loss of oil revenue in mind, the International Monetary Fund (IMF) is projecting a 5.4-percent contraction in Iran’s economy by the end of 2026, with inflation reaching 70 percent. Even during the best of times, Iran’s economy has rarely grown at more than one percent in a quarter over the past 20 years.
The Central Bank of Iran officially valued the rial at 1.5 million to the U.S. dollar on Monday, but no one outside the Iranian government placed any credence on that value. Iranians who make currency trades are using the international rate of 2.02 million to the dollar.
Hemmati sought to control rising anxiety among the Iranian people by claiming that the ten-percent loss in value of the rial over the past two weeks was only “temporary” and was primarily caused by comments from the Trump administration frightening investors.
U.S. Treasury Secretary Scott Bessent said in a Financial Times op-ed on Monday that Iran is about to face “the single greatest financial offensive ever” which should trigger the “endgame” of the current conflict in the Middle East.
“President Trump has decimated Iran’s economy to a point where the rial has never been weaker and inflation has rarely been higher. The regime’s final refuge now lies in the self-deception of fearful nations that still believe accommodating aggression can secure a durable peace,” Bessent wrote.
Bessent said a key component of the “Economic D-Day” initiative will be shutting down the trade and financial assistance Iran is still receiving from other nations.
“Iran’s enablers purchase and transport its petroleum. They facilitate the flow of its finances through exchange houses and free trade zones. They welcome Iran’s flights and maintain registries on its behalf. They turn a blind eye to seaborne fuel transfers and the illicit use of their banks, all while concealing the extent of their complicity,” he wrote.
“Those who sever Iran’s remaining financial and commercial connectivity will reinvigorate their own. They will deepen their access to global capital, reinforce confidence in their markets, and attain the standing they seek in the world economy,” he promised.
President Donald Trump weighed in on Monday with an unusually terse Truth Social post that said simply: “IRAN IS COMPLETELY COLLAPSING!!!”
On Sunday, the new hardline leader of Iran’s Supreme National Security Council, Mohsen Rezaei, said the sanctions previewed by Trump and Bessent constituted an “act of war.”
“If (Trump) wants to do something, we will retaliate in a seismic manner,” he said in an interview with Iranian state media.
“Any escalation of this situation will undoubtedly bring about consequences. Our hands are not tied,” warned Iranian Foreign Ministry spokesman Esmail Baqaei.
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