Iran’s national rial fell to a record low Wednesday, underscoring the economic strain continuing alongside a fragile ceasefire that has largely held since the start of fighting more than a month earlier, the Associated Press reported. The currency dropped as the U.S. naval blockade remained in place, a pressure point officials and analysts say is aimed at Iran’s hard-currency and revenue streams even as direct combat has eased.
AP reported that the rial’s slide risks feeding into inflation across Iran because many imported goods—including food and medicine, electronics and raw materials—track the dollar rate. The currency had largely been stable in the early weeks of the war, when there was reportedly little trading or imports, but its slide began this week and reached 1.8 million to the dollar on Wednesday.
The continuing standoff centers on the Strait of Hormuz, a chokepoint through which about a fifth of the world’s traded oil and gas passes in peacetime. Iran’s closure of the strait has put pressure on both sides and disrupted shipping, while the blockade has contributed to supply and price pressures, AP reported, with frustration growing as dozens of nations repeated calls to open the waterway for humanitarian and economic relief.
AP said Iran’s economy has been battered for years by international sanctions, chronic inflation and a widening gap between official and open-market exchange rates. It said basic household goods were already rising in price before the rial’s most recent fall, citing higher prices over the past two weeks for items including milk, yogurt, cooking oil, bread, rice, cheese and detergents—developments that AP described as consistent with broader inflationary pressure linked to uncertainty, supply disruptions, higher transport and production costs, and the ongoing impact of the U.S. blockade.
In Washington, AP said U.S. President Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz in exchange for the U.S. Navy lifting its blockade of Iranian ports. Trump told Axios that “The blockade is somewhat more effective than the bombing” and added that it was “going to be worse for them,” according to AP’s account of his remarks.
The Iranian proposal, shared with U.S. leaders earlier this week, would have postponed discussions around Iran’s nuclear program, while leaving unresolved the disagreements that led the U.S. and Israel to go to war on Feb. 28, AP reported. Two regional officials told AP that the proposal was part of closed-door discussions involving Iranian and Pakistani officials earlier this week, with the officials speaking anonymously because of the sensitivity of negotiations.
AP also reported that Pakistani Prime Minister Shehbaz Sharif said Wednesday his government was continuing efforts to help ease tensions between the U.S. and Iran following an initial round of direct talks on April 11. In the same Axios interview context, AP said Trump also commented on the United Arab Emirates’ decision to exit OPEC on May 1, framing it as potentially helpful for lowering volatile oil and gas prices.
The war’s economic and fiscal burden also remained in focus. A top U.S. defense official told a congressional hearing on Wednesday that the U.S. has spent an estimated $25 billion so far on the Iran war, AP reported. Jules Hurst III, the acting undersecretary of war for finances, said much of that spending has gone toward munitions and also included the costs of running operations and replacing equipment.
In Dubai, where AP placed its reporting dateline, the sequence of these developments—currency weakness, blockade pressure, Hormuz-related disruptions and diplomatic deadlock—converged on the same question: how long Iran can absorb the strain from outside pressure while the ceasefire holds on paper and both sides remain locked over the terms of access and leverage.