US Treasury Secretary Claims Iran in Economic Death Spiral

US Treasury Secretary Scott Bessent stated that Iran is in an economic death spiral and will eventually be forced to negotiate due to financial pressure and military operations. Speaking after a G20 meeting in Asheville, Bessent argued that Tehran is resorting to kinetic military actions because it is being squeezed economically. He noted that the US is targeting banks and supply networks, including a bank in Dubai, to prevent Iran from converting Chinese renminbi into dollars.

In response, Central Bank Governor Abdolnaser Hemmati denied claims of economic collapse, characterizing US assertions as psychological warfare. Hemmati pledged to inject up to $2 billion into the foreign exchange market to stabilize the Iranian rial, which hit a record low of over 2.1 million per US dollar on Wednesday. While Hemmati acknowledged that inflation and livelihood management have become difficult, he insisted Iran possesses sufficient foreign currency reserves.

The economic volatility follows a US naval blockade of Iranian ports imposed in July and a broader conflict triggered by US-Israeli strikes in February. Bessent further dismissed claims that Iran has closed the Strait of Hormuz, asserting that the US maintains control of the waterway and has conducted limited strikes on Iranian radar equipment along the route. He predicted the current pressure would lead to internal divisions within the Islamic Revolutionary Guard Corps, public resistance, or a new deal with Washington.