Iranian Rial Plunges to Record Low as US Economic Pressure Mounts

The Iranian rial has fallen to a new record low against major international currencies, as intensifying US economic pressure adds to concerns over the country's financial stability.

The euro climbed above 2.55 million rials on September 2 for the first time, according to websites monitoring Iran's currency markets. The US dollar also traded above 2.2 million rials, while the UAE dirham surpassed 600,000 rials.

The latest decline comes as Iran faces growing economic pressure from Washington. On August 24, the US Treasury Department launched Operation Economic Outcast, a campaign designed to restrict Iran's access to international financial networks and encourage foreign governments and businesses to reduce their economic dealings with Tehran.

The weakening currency has also driven demand for traditional stores of value inside Iran. The price of the Imami gold coin, one of the country's most widely traded forms of bullion, rose to approximately 2.26 billion rials on September 2, according to market reports.

The increase came even as international gold prices declined, highlighting the extent to which Iranian investors are turning to gold as protection against the falling value of the national currency.

Iranian officials have sought to reassure the public that the economy remains under control. Central Bank Governor Abdolnaser Hemmati rejected claims on September 1 that Iran was running short of foreign-exchange reserves or approaching an economic collapse.

Hemmati said the Central Bank was prepared to inject as much as $2 billion into the foreign-exchange market if necessary in an effort to support the rial and calm financial markets.

Despite those assurances, the currency has continued to weaken. The rial had already lost almost 10 percent of its value during the two weeks before August 24, and its decline has accelerated since the US sanctions campaign began.

The latest losses underline the growing challenges facing Iran as Washington intensifies efforts to restrict Tehran's economic lifelines and increase pressure on its government.