DUBAI: Iran’s currency fell below the psychologically key level of 1,000,000 rial per US dollar on Tuesday, as market participants saw no end in sight to sanctions under US President Donald Trump’s renewed “maximum pressure” campaign.

Trump said earlier this month that he had sent a letter to Iran’s top authority, Supreme Leader Ayatollah Ali Khamenei, warning that Iran’s nuclear programme could either be dealt with through negotiations or militarily.

Khamenei rejected the US offer for talks as a “deception” and Iranian Foreign Minister Abbas Araqchi said last week that negotiations with Washington were impossible unless its policy changed.

The apparent diplomatic deadlock has raised fears of potential conflict, although Iranian officials have sought to assuage such concerns. “I am certain there won’t be any war as we are fully prepared for such condition… so that no one will think about attacking Iran,” Araqchi said on Monday, during a meeting with the Iranian Red Crescent.

Iran’s currency dropped to a record low of 1,039,000 rial to the US dollar according to Bonbast.com, which gathers live data from Iranian exchanges.

This represents a more than halving of the currency’s value since President Masoud Pezeshkian took office last year.

Facing an annual inflation rate of about 40 per cent, Iranians seeking safe havens for their savings have been buying dollars, other hard currencies or gold, suggesting further headwinds for the rial.

The Iranian rial stood around 55,000 to the US dollar in 2018, when US sanctions were reimposed by the first Trump administration to force Tehran to the negotiating table by limiting its oil exports and access to foreign currency. The US has issued four rounds of sanctions on Iran’s oil sales since Trump’s return to the White House.

Published in Dawn, March 26th, 2025