Iran rial falls as US sanctions tighten

Iran's rial hit record lows on Monday after the United States launched a new sanctions campaign that officials said is designed to choke off Tehran's remaining financial links. Data showed the currency weakened following the operation's rollout, and Treasury Secretary Bessent said the measures would continue to target networks linked to Iran's military funding.

Operation Economic Outcast targets banks and shipping

Market participants said reduced foreign currency inflows can translate quickly into pressure on the rial because importers and traders need dollars for settlements. The central bank's reserves and its ability to support the currency will therefore be a key constraint, officials added.

Investors will watch whether the central bank intervenes to stabilise the currency by October 5, 2026. If intervention fails, the rial may stay under sustained pressure and import costs could rise; if reserves are deployed effectively, volatility may ease over the following weeks.

Officials said Operation Economic Outcast, launched on August 24, aims to sever Iran's remaining financial and commercial links, with particular focus on banking, aviation, shipping and networks accused of helping fund military activities. The measures, officials said, restrict correspondent banking and impose limits on firms that handle dollar-denominated trade, reducing avenues for foreign currency to enter Iran's economy.