Iran's rial slid to a new record low on Tuesday, with traders exchanging over 2.5 million rials for one U.S. dollar. The slide comes as the U.S. and Iran hold mediated talks aimed at reopening the Strait of Hormuz, an effort that continues despite President Trump rejecting an Iranian proposal tied to sanctions relief.
Rial hits fresh record low
Iran's currency weakened to a new record low on Tuesday, a sign of the toll the ongoing Middle East war has taken on the Iranian economy. Traders were exchanging over 2.5 million rials for one U.S. dollar, compared with a previous low of 2.2 million on September 2, according to the Associated Press. Since the joint U.S. and Israeli assault on Iran began in late February, the rial has steadily slipped to new lows.
Talks focus on reopening Hormuz
Against this backdrop, the U.S. and Iran have been speaking through mediators this week. According to the Associated Press, Iran's top diplomat described the talks as "more serious." The discussions aim to forge a deal to reopen the vital Strait of Hormuz, a waterway through which roughly a fifth of the world's oil and liquefied natural gas flowed before the war. Iran's foreign minister told domestic media that the current focus is solely on Hormuz, and that the matter will be raised to American negotiators through Qatari mediators, who will then update Tehran.
Trump rejects Iranian proposal
Mediation efforts are continuing to push for an end to the fighting. However, the drive was complicated earlier this week when Trump rejected an Iranian proposal to reopen Hormuz within seven days in exchange for lifting the American naval blockade of Iranian ports, releasing frozen Iranian assets, and waiving sanctions on Iranian oil.
Domestic pressure builds on both sides
The Iranian Revolutionary Guard Corps urged American citizens to press Washington to end the war, a message arriving weeks before critical U.S. midterm elections. An IRGC spokesperson said the only way the conflict ends is for the U.S. to submit to defeat and withdraw from the Middle East, according to the Associated Press. Recent polls suggest Trump's Republican Party faces a difficult fight to retain control of Congress, as voters express frustration over the war and its effect on gasoline and diesel prices. Trump and White House officials have said they are now squeezing Iran economically until Tehran caves to U.S. demands, with Trump saying the war is likely to end after the November elections.
Source: Investing.com (AP)
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