Iran's rial hits record low as tension spikes with the US

The Iranian rial fell to a record low against the US dollar on the unofficial market on Sunday, a day after the US President Donald Trump's administration declared all United Nations sanctions on Tehran had been restored.

The dollar was offered for as much as 273,000 rials, up from 267,800 rials on Saturday, according to foreign exchange site Bonbast.com, which tracks the unofficial market.

Iran has dismissed the US move as "void and illegal" and UN Secretary-General Antonio Guterres told the Security Council on Saturday he cannot take any action on the US declaration because "there would appear to be uncertainty" on the issue.

The three European parties to the nuclear deal - France, Britain and Germany - said in a statement on Sunday that any decision or action taken to reimpose UN sanctions "would be incapable of legal effect" because Washington used a mechanism agreed under a 2015 nuclear deal between Iran and world powers, which the United States quit in 2018.

However, Trump plans to issue an executive order allowing him to impose US sanctions on anyone violating sanctions against Iran.

The Iranian foreign ministry described Washington's efforts as "futile", adding that "the US approach is a major threat to the international peace and security and an unprecedented threat to the UN and the Security Council".

"Iran emphasizes that if the US, directly or with the cooperation of a number of its allies, makes any move in line with these threats, it will face a serious reaction and should account for all its dangerous consequences," the ministry said in a statement, without elaborating.

Washington has unilaterally reimposed sanctions on Iran since 2018, which combined with a drop in oil prices have crippled the economy in Iran, which also has the highest COVID-19 death toll in the Middle East with 24,301 deaths.

Iran's rial has lost about 49% of its value in 2020.