The Iranian rial has hit an all-time low against the US dollar, plunging in value following Donald Trump's election victory. This signals tough times ahead for Tehran's economy as the former president gears up for another term in the White House. The steep drop in the rial's value reflects fears in Iran that Trump will impose harsh new economic sanctions on the country, further crippling its economy.

Bracing for a Renewed "Maximum Pressure" Campaign

The Rial's Downward Spiral

The Iranian rial traded at a record low of 703,000 to the US dollar early on Wednesday, before settling at 696,150 to the dollar, according to the Associated Press. This dramatic decline in the rial's value reflects the growing anxiety in Iran about the prospect of a second Trump presidency and the potential for a renewed "maximum pressure" campaign against the country.During his first term, Trump decimated Iran's economy with a barrage of sanctions, cutting the country off from the global financial system and severely restricting its oil exports. This "maximum pressure" strategy was aimed at forcing Iran to renegotiate the 2015 nuclear deal, which the Trump administration had withdrawn from.

Dismantling the Biden-Harris Approach

The Biden-Harris administration had sought to dismantle Trump's "maximum pressure" campaign, in a bid to entice Iran back to the negotiating table and revive the nuclear accord. Under the Biden administration, Tehran was given access to an estimated $100 billion in cash resources, which helped the country arm a network of regional terror proxies that have wreaked havoc on Israel and American military positions in the Middle East.

Bracing for a Second Trump Term

With the prospect of a second Trump term looming, Iran will have to make tough choices about its ongoing conflict with Israel. The country has already promised a crushing response to Israel's first direct attack last month, but may now decide to hold fire given Trump's staunch support for the Jewish state. In 2020, Trump greenlit the assassination of Quds Force commander Qassem Soleimani, a move that further escalated tensions between the US and Iran.

Iran's Defiant Stance

Despite the plummeting value of the rial, Iran has sought to downplay the significance of the US presidential election, stating that it "has nothing to do with us." The country's foreign ministry has claimed that "the general policies of the U.S. and Iran are constant" and that "it doesn't matter who becomes the president in the United States because all the necessary planning has been made in advance."

The Broader Economic Implications

The steep drop in the value of the Iranian rial has had ripple effects across the global financial markets. As the rial tanked, the American stock market surged, with the Dow Jones Industrial Average jumping more than 1,300 points to 45,557 as of mid-day trading. The Nasdaq also grew by more than 430 points, hitting 18,875 in the afternoon.This divergence in the fortunes of the US and Iranian economies highlights the ongoing geopolitical tensions between the two countries, and the potential for further economic turmoil as the prospect of a second Trump presidency looms large over Tehran.