Iran rial hits record low as war and US blockade deepen crisis

Iran's rial slid to a fresh record low as indirect talks with the US over the Strait of Hormuz intensified. The fall highlights how war, sanctions and the naval blockade are squeezing Tehran even as diplomacy continues.Stock photo used for illustrationDubai,Sep 29, 2026 17:36 ISTIran's currency fell to a new record low on Tuesday, with traders in Tehran exchanging more than 2.5 million rials for one US dollar, underlining the pressure the war in the Middle East has put on the country's economy. The drop came 27 days after the rial touched its previous record low of 2.2 million to the dollar on September 2, and the currency has repeatedly weakened since the war began in February.The economic slide came as Iran said indirect talks with the United States on reopening the Strait of Hormuz had become "more serious". At the same time, the Iranian Revolutionary Guard Corps appealed directly to Americans to protest the conflict, as Washington maintained that sanctions and a naval blockade were intensifying pressure on Tehran.Iran's economy has been under strain for years because of international sanctions. Since the start of the war, new sanctions and a US naval blockade on Iranian oil have pushed it into a sharper decline.Foreign Minister Abbas Araghchi told Iranian media late on Monday that the "current focus is solely on the Strait of Hormuz", the key waterway at the centre of the war. He made the remarks shortly before leaving New York, where he attended last week's UN General Assembly gathering, and after meetings with Pakistani and Qatari mediators. Araghchi said Qatari intermediaries were expected to speak again with the US side. "They are set to raise the matter with the American side once more, after which the final US response will be conveyed to us," he said. "If there is a response, the Qataris will convey it to us and a decision will be made in Tehran on that basis."Officials, including from the US, have confirmed to The Associated Press that mediators are working with Iran and the US to try to broker a deal to end the fighting and reopen the strait. The efforts have continued even after US President Donald Trump earlier this week rejected an Iranian proposal to reopen the waterway within seven days if the US lifted its blockade of Iranian ports, released frozen Iranian assets and waived sanctions on Iranian oil sales, among other conditions. In Tehran on Tuesday, Revolutionary Guard spokesman Gen. Hossein Mohebbi read out a letter urging Americans to press their government to end the war against Iran. He said the only way for the conflict to end was for Washington to admit defeat and leave the Middle East.Mohebbi also accused the US of using Iran's nuclear programme as a pretext to "plunder Iran's wealth" and turn the country "back into a colony". He said Washington and others had failed in their belief that military and economic pressure would force Tehran to submit, and added that the US "has no choice but to acknowledge defeat and leave the region". "This is how the war will end," he said.His remarks came weeks before the US midterm elections, as Trump's Republican Party faces a difficult contest to retain control of Congress. Polling has shown the war has darkened the mood among American voters before the November 3 election, with higher petrol prices linked to the conflict emerging as a major issue.Trump and his senior aides have said Iran's economy cannot sustain the conflict for much longer and have expressed confidence that Tehran will eventually yield. The US president said soon after launching the war that it would last only a matter of weeks, but has more recently said it will probably end after the November elections.US Secretary of State Marco Rubio said on Fox News on Monday that Iran was heading towards an economic "cataclysm". Administration officials say new sanctions and the naval blockade meant to stop Iranian oil reaching the market are having the intended effect. "And so when you're denying them money through oil sales and sanctions, you're not just punishing them," Rubio said. "You are preventing them from getting access to money that they will use to try and kill Americans and others around the world and their own people and build weapons and threaten the world and ultimately break out to a nuclear weapon programme."In sum, Iran's currency has fallen to another record low as the war, sanctions and the US blockade deepen the country's economic crisis, even as mediation efforts over the Strait of Hormuz continue and both Tehran and Washington harden their public positions.With PTI Inputs- Ends