DUBAI, United Arab Emirates (AP) – Iran’s domestic currency, the rial, fell to a record low Wednesday, while the U.S. naval blockade increases pressure on its already battered economy. fragile ceasefire.
Experts warn that the rial could fall further fuel inflation Many imports in this country, from food and medicine to electronics and raw materials, are affected by the dollar rate.
The blockade cut off a vital source of government revenue and foreign exchange by halting or disrupting oil shipments. Iranian leaders are betting that their economy, built to be self-sustaining under decades of international sanctions, can withstand the pain.
Four weeks after a ceasefire that largely halted fighting in Iran, the United States and Iran remain locked in a standoff over the conflict. Strait of HormuzIn normal times, one-fifth of the oil and gas traded around the world passes through here.
Iranian Strait closure pressured and influenced both sides world economydriving up the price of food, fuel, and other products made from oil. Frustration has been mounting this week as dozens of countries have repeatedly called for the vital waterway to be opened for both humanitarian and economic relief.
President Trump rejects Iran’s offer
Meanwhile, US President Donald Trump told Axios on Wednesday that he has rejected Iran’s offer to reopen the Strait of Hormuz in exchange for the US Navy lifting the blockade of Iranian ports.
Iran’s proposal shared with U.S. leaders this week would postpone discussions over Iran’s nuclear program, leaving unresolved disagreements that have led the United States and Israel. go to war February 28th.
“Blockades are somewhat more effective than bombing,” Trump told Axios. “And it’s going to get even worse for them. They can’t have nuclear weapons.”
Iran’s offer would have pushed negotiations forward the country’s nuclear program This was later revealed by two local officials earlier this week. Officials with knowledge of the proposal spoke on condition of anonymity to discuss private negotiations between Iranian and Pakistani officials.
One of the main reasons President Trump spoke of war was to deny Iran’s ability to develop nuclear weapons.
Pakistan Prime Minister Shehbaz Sharif said on Wednesday that the Pakistani government continues its efforts to ease tensions between the United States and Iran after the first round of direct talks on April 11.
President Trump welcomes UAE’s decision to withdraw from OPEC
Decision to leave the United Arab Emirates OPEC President Trump said oil price changes on May 1 could help calm volatile oil markets around the world rocked by war.
“Ultimately, I think it’s a good thing to bring down gas prices, oil prices, everything,” Trump said during an Oval Office briefing with reporters.
Crude oil prices are steadily rising; continued to increase rapidly on wednesday.
Iranian currency plummets after stabilizing
Iran’s rial remained stable during the early weeks of the war, with little trade or imports. The decline began this week, hitting an all-time low of 1.8 million to the dollar on Wednesday.
The blow comes months after a currency shock fueled nationwide protests in January, deepening public anger over rising prices and uncertainty about the country’s economic future.
Iran’s economy has faced decades of sanctions, chronic inflation, and a widening gap between the official and open market exchange rates.
Prices of basic household items were already rising before the recent depreciation of the rial, adding to the pressure on household budgets. Over the past two weeks, people buying everyday items have faced soaring prices for items such as milk, yogurt, cooking oil, bread, rice, cheese and detergent.
This increase is indicative of broader inflationary pressures in the economy caused by uncertainty, supply disruptions, rising transportation and production costs, and the continued impact of the U.S. economic lockdown. The latest decline in the rial could put further pressure on goods, especially those related to imports, packaging and raw materials.
US war costs reach $25 billion
The United States spent an estimated $25 billion So far on the Iran war, a senior defense official said at a Congressional hearing Wednesday.
Much of the money went to munitions, but the cost also includes operations and equipment replacement, Jules Hearst III, acting assistant secretary of the Army for finance, told the House Armed Services Committee.
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Associated Press writers Munir Ahmed in Islamabad and Colin Binkley, Stephen Groves and Aamer Madani in Washington contributed to this report.
