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Iran’s currency plunged through another historic low Monday as the Trump administration prepared a new sanctions offensive aimed at tightening the financial pressure on Tehran after nearly six months of war and disruption across the Persian Gulf.

The rial, according to a report from the Associated Press, fell to roughly 2.02 million against the US dollar on Tehran’s open market, breaking through the psychologically important 2 million mark for the first time.

Iran’s heavily managed official exchange rate remains considerably stronger, at around 1.5 million rials to the dollar, but the free-market rate is the price faced by many ordinary Iranians seeking hard currency.

The latest decline marked a sharp acceleration from only a week earlier, when the dollar traded at around 1.865 million rials. That amounts to a depreciation of more than 7 percent in a matter of days.

Pressure on the rial was already severe before the United States and Israel launched military operations against Iran on Feb. 28. Since then, war, sanctions, disrupted oil exports and restricted access to foreign currency have driven the rial repeatedly to new lows.

The damage is increasingly visible in Iranian households. Rice prices have risen by roughly 60 percent since the war began, while beef prices have climbed by more than 150 percent, according to figures cited in the reporting.

The International Monetary Fund expects Iran’s economy to contract by more than 5 percent. A weaker rial further increases the domestic cost of imported food, medicine, machinery and industrial materials, feeding inflation and encouraging Iranians to seek dollars, gold and other stores of value.

In central Tehran on Monday, residents lined up to convert savings into foreign currency before the rial weakened further. Sadegh Mahmoudi, 73, joined around a dozen people waiting to purchase dollars with what remained of his savings.

“There is no hope for a deal and peace,” Mahmoudi said. His pessimism reflected the mood of a market increasingly skeptical that diplomacy will produce sanctions relief in the immediate future.

The Trump administration, meanwhile, is preparing to intensify the pressure even further. Treasury Secretary Scott Bessent has signaled a new round of sanctions that could include secondary measures against foreign companies, financial institutions and countries continuing significant business with Iran.

President Donald Trump this morning celebrated the currency collapse on social media, writing “IRAN IS COMPLETELY COLLAPSING!!!” he wrote on social media ahead of the expected announcement.

Treasury Secretary Scott Bessent has portrayed the new campaign as an attempt to close remaining escape routes available to Tehran. In a Financial Times opinion piece, he said Trump had driven Iran’s economy to the 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. Treasury officials have indicated that companies helping Iran export oil or gain access to foreign currency will face particular scrutiny.

China will be central to the next phase of the sanctions campaign because it remains Iran’s most important oil customer. Iranian crude shipments to China have already fallen sharply as Washington increases pressure on shipping, refiners and financial networks involved in the trade.

The United Arab Emirates has also moved to reduce its economic exposure to Iran, announcing last week that it would suspend trade. The decision was particularly damaging because the UAE has historically served as one of Iran’s largest trading partners and a major gateway for imports.

Tehran, for its part, responded with warnings rather than concessions. Foreign Ministry spokesman Esmail Baghaei said Monday that further escalation by Washington would have repercussions.

“Any escalation of this situation will undoubtedly bring about consequences,” Baghaei told reporters in Tehran. “Our hands are not tied.”

Iran retains a powerful lever of its own—namely the Strait of Hormuz. Before the current conflict, roughly one-fifth of globally traded oil passed through the narrow waterway separating Iran from Oman.

Shipping through Hormuz has slowed dramatically as attacks, threats and uncertainty have driven many commercial operators away. Tehran has repeatedly linked full reopening of the route to U.S. sanctions relief and an end to measures restricting Iranian oil exports.

The resulting standoff has transformed the war into an economic contest stretching well beyond Iran itself. Tehran’s ability to threaten tanker traffic raises global energy prices and imposes costs on the United States, Europe, Gulf states and major Asian importers even as sanctions inflict mounting damage inside Iran.

Oman has emerged as a critical intermediary. Foreign Minister Badr Albusaidi is scheduled to travel to Tehran on Tuesday for further discussions with Iranian officials, with security and navigation in the Strait of Hormuz expected to dominate the talks.

Various formulas for an arrangement involving Oman and Iran have circulated during weeks of diplomacy, including proposals designed to guarantee safer maritime traffic. Tehran, however, has previously rejected broader regional joint management of Hormuz, leaving the final structure of any agreement unresolved.

The diplomatic track has also drawn in Pakistan. Army chief Field Marshal Asim Munir traveled to Tehran as Islamabad continued a mediation role that helped produce a 60-day ceasefire earlier in the summer.

That ceasefire failed to produce a comprehensive political settlement. A 60-day diplomatic window established under a June memorandum between Washington and Tehran expired without agreement on Iran’s nuclear program, oil sanctions or access to frozen Iranian assets.

The failure of those talks has returned both sides to coercion. The Trump administration is betting that a collapsing currency, declining oil revenue and tougher secondary sanctions will eventually force Tehran back to negotiations on American terms.

Iran is betting on a different pressure point — the vulnerability of the world economy to a prolonged disruption in Hormuz. By keeping maritime traffic uncertain, Tehran believes it can impose costs far beyond its borders even as its own economy contracts.

That strategy also carries considerable risks for the Iranian leadership. Continued depreciation of the rial, rising food prices and possible fuel-price increases could turn a foreign-policy confrontation into renewed domestic unrest if household living standards continue deteriorating.

At the moment, the confrontation remains finely balanced between financial pressure and strategic disruption. The US has the larger economic arsenal, but Tehran still controls geography capable of shaking global oil markets.

Monday’s record low in the rial showed how badly Iran is being squeezed. The next question is whether the pressure forces Tehran toward a deal—or drives the leadership to tighten its grip on Hormuz and raise the price of the conflict for everyone else.

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