The latest drop follows a currency shock several months ago, when the rial fell from around 1.4 million to 1.6 million per US dollar in under a week, as the war moves turns into an economic clash to exhaust the Iranian regime' options.
The Iran war has turned towards an economic crossfire, as the Trump administration has discussed maintaining its naval blockade of Iran's ports "for months if needed" and the Iranian rial hit a new historic low on Wednesday, trading at 1.8 million rials to the US dollar — a rate unthinkable before the war began in late February.
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Trump told US media outlet Axios on Wednesday that he had no intention of lifting the blockade, rejecting Tehran's proposal to reopen the Strait of Hormuz in exchange for an end to the US naval siege of Iranian ports.
"The blockade is somewhat more effective than the bombing," he said. "They are choking like a stuffed pig. And it is going to be worse for them. They can't have a nuclear weapon."
The White House separately confirmed that Trump and senior administration officials met with oil executives and others this week to discuss continuing the blockade "for months if needed" to exert the maximum economic pressure on the Iranian regime and limiting the impact on US consumers.
On Wednesday, the euro traded at 2.1 million rials as the rial's collapse accelerated.
When the war began on 28 February, the currency had remained relatively stable as markets shut down and trading activity dried up.
As businesses have reopened, suppressed demand has hit simultaneously with tighter sanctions, sending the currency into freefall over the past two days.
The latest drop follows a currency shock several months ago, when the rial fell from around 1.4 million to 1.6 million per US dollar in under a week.
The initial collapse was one of the triggers for the nationwide protests in January, which Iran's security forces put down with mass killings and arrests.
The new fall could further deepen an inflation crisis already at historic levels.
Iran's Statistical Centre reported last month that annual inflation reached 53.7% in Farvardin — the highest rate recorded since 1943. Point-to-point inflation stood at 73.5%, meaning purchasing power has roughly halved in under a year.
Food prices are rising sharply. According to unofficial figures published in Iranian media, the price of chicken rose 75% in the past month alone, beef and lamb by 68%, and many dairy products by as much as 50%.
Imported goods priced in dollars — including medicine and raw materials — are also rising as the currency declines.
If the blockade holds and the government cannot inject foreign currency into the economy, the rial is expected to break through further thresholds in the coming weeks, deepening the recession and increasing absolute poverty.