Tehran: Iran's economy is experiencing renewed stress as Washington prepares to implement some of the toughest sanctions against Tehran. The Iranian currency hit a new low on August 24, with the dollar reaching 2,016,400 rials on the open market.

According to Radio Free Europe Radio Liberty, U.S. Treasury Secretary Scott Bessent has warned of an economic D-Day for Iran, with tougher sanctions and potential secondary measures against countries and companies that continue business with Tehran. Ahmad Alavi, an Iranian economics professor in Sweden, notes that the recent volatility is fueled by long-standing structural issues and expectations of tougher sanctions.

Alavi points out that Iran's economy suffers from ineffective policymaking, poor governance, sanctions, and a wartime environment. He emphasizes that market psychology is playing an increasingly important role, as the exchange rate rise intensifies inflation, creating a vicious cycle. He is skeptical that increasing non-oil exports can provide a quick solution, given Iran's banking isolation and reliance on intermediaries.

However, U.S.-based political analyst Ebrahim Roshandel argues that bolstering sanctions may not weaken forces opposed to negotiations with Washington. He states that sanctions have shrunk Iran's formal economy while increasing the relative power of opaque, sanctions-resistant networks linked to powerful institutions. Roshandel describes President Masud Pezeshkian as having little real authority, with a government boxed in by parallel, unelected power centers.

Roshandel concludes that sanctions have not punished opponents of a deal but instead have financed them, increasing the Islamic Revolutionary Guards Corps' share of the economy and decision-making power.