Iran Receives U.S. Reply as Rial Falls Past 2.5 Million

Iran said it received a formal U.S. response to a proposal to end the war and reopen the Strait of Hormuz as the rial fell past 2.5 million per dollar in Tehran’s free market, highlighting the parallel diplomatic and economic pressure on the country.

Iranian officials said Sept. 30 that Tehran had received Washington’s reply, but did not disclose its contents or whether the United States accepted, rejected or amended the proposal. The two sides resumed indirect discussions during the U.N. General Assembly in New York, with Qatar and Pakistan serving as mediators.

The rial traded at 2.542 million per U.S. dollar on Sept. 29 and reached an intraday high of 2.548 million in Tehran’s free market. The previous reported free-market record was 2.2 million per dollar on Sept. 2.

Iran’s proposal would establish a seven-day process to reopen the Strait of Hormuz if the United States lifted its blockade of Iranian ports, released frozen Iranian assets and waived sanctions on Iranian oil sales, among other conditions. The waterway is central to the negotiations because of its importance to energy shipments.

The diplomatic developments followed new U.S. sanctions. On Sept. 29, OFAC sanctioned 10 individuals and entities across multiple jurisdictions, saying they were involved in procuring weapons and weapons components for Iran’s Ministry of Defense and Armed Forces Logistics.

The designations were part of “Operation Economic Outcast,” which targets financial, technological and material support for the Iranian government. The sanctions block the targeted parties’ property under U.S. jurisdiction and prohibit transactions by U.S. persons.

A U.S.-Iran memorandum of understanding announced in June included reopening the Strait of Hormuz and preventing Iran from obtaining a nuclear weapon. The latest development follows Iran’s earlier review of a U.S. response to a proposal to end hostilities.