Iran Protests Erupt as Currency Collapses and Central Bank Head Resigns
Iran is facing its largest wave of protests in three years, triggered by a dramatic collapse in the value of its currency, the rial, and the resignation of Central Bank Governor Mohammad Reza Farzin. The unrest underscores growing economic desperation and political tensions within the country.
The protests began Monday, with traders and shopkeepers demonstrating in Tehran’s Saadi Street and the Shush neighborhood, near the historic Grand Bazaar. The Grand Bazaar holds critically important symbolic weight, having played a pivotal role in the 1979 islamic Revolution that overthrew the monarchy. The official IRNA news agency confirmed the demonstrations, while witnesses reported similar rallies spreading to major cities including Isfahan, Shiraz, and Mashhad. In some areas of Tehran, authorities responded by deploying tear gas to disperse the crowds.
These demonstrations represent a significant escalation since similar, smaller protests occurred on Sunday, focused on mobile markets in downtown Tehran where participants voiced anti-government slogans. Monday’s events are the most widespread since 2022, when the death of Mahsa Jina Amini while in police custody ignited nationwide outrage over the country’s strict dress code and broader political repression.
The immediate catalyst for the current unrest is the plummeting value of the Iranian rial. On Sunday, the rial reached a record low of 1.42 million to the US dollar, before slightly recovering to 1.38 million on Monday. this represents a staggering decline from the rate of approximately 430,000 rials to the dollar when Farzin assumed office in 2022. The currency’s depreciation is rapidly exacerbating inflationary pressures, driving up the cost of essential goods and straining household finances.
According to data released by the state statistics center, inflation reached 42.2% in December, a 1.8% increase from the previous month. The price of food has surged by 72%, and health and medical expenses have risen by 50% year-over-year, leading many analysts to warn of approaching hyperinflation. Adding to the economic anxieties, reports in Iranian media suggest the government is considering tax increases starting in the new Iranian year on March 21.
The rial’s decline is inextricably linked to the unraveling of the 2015 nuclear accord.At the time of the agreement, which lifted international sanctions in exchange for limitations on Iran’s nuclear program, the currency traded at 32,000 rials to the dollar. However, the unilateral withdrawal of the United States from the deal in 2018 under President Donald Trump led to the reimposition of sanctions, crippling the Iranian economy.
Further compounding the situation is geopolitical uncertainty. The recent 12-day conflict involving Iran and Israel in June has heightened fears of a broader regional confrontation,potentially drawing in the United States and further destabilizing the market. In September, the United Nations reimposed nuclear-related sanctions on Iran through a “snapback” mechanism, freezing Iranian assets abroad and restricting arms transactions.
The current crisis represents a critical juncture for Iran, as economic hardship and political discontent converge. The resignation of the Central Bank governor signals a lack of confidence.
Why: The protests erupted due to the collapse of the Iranian rial and the
