Iranian rial hits historic low: 1.35 million to the dollar

The Iranian rial has fallen to a historic low against the U.S. dollar, reaching 1.35 million rials to the dollar on the free market, as Al Jazeera reports. The previous record low was 1.1 million rials to the dollar, recorded in July.

The latest drop came immediately after U.S. President Donald Trump threatened new sanctions on Iranian oil exports, deepening the economic war against Tehran.

Iran’s economy has been in crisis for years, with inflation exceeding 40 percent. The central bank has tried to defend the currency by selling dollars on the market, but foreign reserves are running out and its ability to stabilize the exchange rate is shrinking.

The rial’s steep devaluation reflects uncertainty over the future of the nuclear program talks and the fate of the Strait of Hormuz, through which about one-fifth of the world’s oil passes.