Iran's currency hit a new record low Monday, with the rial dropping to 2.02 million to the US dollar as markets opened, as the economy has been battered by ongoing sanctions and an American naval blockade.

The drop on Iran's informal currency markets came as Washington prepared to announce even more extensive sanctions that it said would be an "economic D-Day" and would add further pressure.

The currency had already been under pressure before the US and Israel attacked Iran on February 28, amid double-digit inflation and negative growth but has been hitting new record lows as nearly six months of war have taken an even greater toll.