Iran economy meltdown as war sends currency plunging to record low

Iran’s national rial currency plunged to a record low on Wednesday against the dollar as a shaky ceasefire with the US and Israel hangs in the balance.

The rial had remained stable in the early weeks of the war that began two months ago on February 28, in part because there was little trading or imports. However, the rial has started to slide rapidly in recent days, and on Wednesday was 1.8 million to the dollar. The latest slide of Iran’s currency comes months after a currency shock helped fuel nationwide protests in January. At the time, the rial weakened from about 1.4 million to 1.6 million to the dollar in less than a week, deepening public anger over rising prices and fears about the country’s economic future. Experts have warned the currency’s fall is likely to further fuel inflation in a country where many imported goods, from food and medicine to electronics and raw materials, are affected by the dollar rate.

A US naval blockade in the Strait of Hormuz during the ceasefire has significantly ramped up pressure on Iran’s already battered economy, cutting into a key source of government revenue and hard currency by stopping or intercepting oil shipments.

Iran’s economy has faced decades of sanctions, chronic inflation and a widening gap between official and open-market exchange rates.

The US President has rejected Iran’s proposal to reopen the Strait of Hormuz, arguing that Tehran’s offer avoided the core issue of its nuclear programme.

He told Axios: “The blockade is somewhat more effective than the bombing.

“They are choking like a stuffed pig. And it is going to be worse for them. They can’t have a nuclear weapon.”

In an fiery Truth Social tirade against the regime earlier today, Trump wrote: “Iran can’t get their act together. They don’t know how to sign a nonnuclear deal. They better get smart soon!”