Head of the Central Bank of Iran steps down as protests break out over a currency in free fall
Protests broke out across Iran on December 29 after the rial slid to a fresh record low against the US dollar, intensifying public anger over soaring prices and prompting the resignation of the central bank governor.
According to AP, demonstrations were reported in central Tehran, including along Saadi Street and in the Shush district near the Grand Bazaar, a commercial hub whose merchants played a pivotal role in the 1979 revolution. State media and multiple local sources confirmed that Mohammad Reza Farzin had stepped down as head of the Central Bank of Iran, following days of speculation about his future amid mounting pressure over the currency’s collapse.
Witnesses cited by the agency said traders shut their shops and urged others to follow suit, disrupting business in parts of the capital. Protests were also reported in several major cities, including Isfahan, Shiraz and Mashhad. It was reported by AP that in some areas of Tehran, police used tear gas to disperse crowds.
The unrest marks the most significant street mobilisation since 2022, when nationwide demonstrations erupted after the death of Mahsa Jina Amini while in police custody, an episode that exposed deep social and political tensions within the country.
The immediate trigger in the past week has been the sharp fall in the rial, which briefly touched about 1.42mn to the dollar on December 28, before recovering slightly to around 1.38mn a day later. When Farzin took office in 2022, the currency was trading at roughly 430,000 to the dollar, underlining the scale of the decline during his tenure.
The currency’s weakness has fuelled already severe inflationary pressures. According to Iran’s official statistics centre, annual inflation reached 42.2% in December, up from November. Food prices were reported to be more than 70% higher than a year earlier, while health and medical costs rose by about half, further eroding household incomes. Economists and critics have warned that the figures point to the risk of hyperinflation.
Concerns have been compounded by reports that the government is considering tax increases in the new Iranian year starting on March 21, as well as recent changes to fuel pricing that are expected to push living costs higher.
The longer-term backdrop remains bleak. The rial traded at about 32,000 to the dollar when the 2015 nuclear agreement was signed, before the deal unravelled following the US withdrawal in 2018 and the reimposition of sanctions. More recently, uncertainty has been heightened by fears of renewed regional conflict after a brief war involving Iran and Israel earlier this year, and by the UN’s decision in September to reinstate nuclear-related sanctions, freezing assets and tightening restrictions on trade and defence.
Iran’s currency collapse sparks second day of trader protests
Protesters closed shops for a second day as the rial hit new lows on the free market, amplifying inflation fears and highlighting the widening gap between official and street exchange rates.
Iranian traders and shopkeepers staged a second day of protests Monday after the country’s currency plummeted to a new record low against the US dollar.
Videos on social media showed hundreds taking part in rallies in Saadi Street in downtown Tehran as well as in the Shush neighbourhood near Tehran's main Grand Bazaar, which played a crucial role in the 1979 Islamic Revolution that ousted the monarchy and brought Islamists to power.
Traders shut their shops and asked others to do the same. The semiofficial ILNA news agency said many businesses and merchants stopped trading even though some kept their shops open.
There were no reports of police raids though security was tight at the protests, according to witnesses.
On Sunday, protest gatherings were limited to two major mobile markets in downtown Tehran, where the demonstrators chanted anti-government slogans.
Rapidly devaluing currency
Iran's rial on Sunday plunged to 1.42 million to the dollar. On Monday, it traded at 1.38 million rials to the dollar.
Exchange rates for Iran’s currency vary sharply depending on whether official or free-market figures are used. On international forex platforms, the euro trades at around 49,000 rials, a rate that reflects Iran’s tightly controlled official exchange system that is largely inaccessible to ordinary Iranians.
In contrast, the free-market rate — commonly cited by local traders and international media — is far weaker, with the euro trading at well over a million rials, or around 150,000 tomans, highlighting the gap between state-set rates and the real value of the currency on the street amid inflation, sanctions and capital flight.
The rapid depreciation is compounding inflationary pressure, pushing up prices of food and other daily necessities and further straining household budgets, a trend that could worsen by a gasoline price change introduced in recent days.
Is hyperinflation around the corner?
According to the state statistics center, inflation rate in December rose to 42.2% from the same period last year, and is 1.8% higher than in November. Foodstuff prices rose 72% and health and medical items were up 50% from December last year, according to the statistics center. Many critics see the rate a sign of an approaching hyperinflation.
Reports in official Iranian media said that the government plans to increase taxes in the Iranian new year that begins on 21 March have caused more concern.
Iran’s currency was officially trading at 32,000 rials to the dollar at the time of the 2015 nuclear accord that lifted international sanctions in exchange for tight controls on Iran’s nuclear program.
US tensions strain the economy
That deal unraveled after US President Donald Trump unilaterally withdrew the United States from it in 2018. There is also uncertainty over the risk of renewed conflict following June’s 12-day war involving Iran and Israel.
Many Iranians also fear the possibility of a broader confrontation that could draw in the United States, adding to market anxiety.
In September, the United Nations reimposed nuclear-related sanctions on Iran through what diplomats described as the “snapback” mechanism. Those measures once again froze Iranian assets abroad, halted arms transactions with Tehran and imposed penalties tied to Iran’s ballistic missile program.
Iranian shopkeepers protest, shut stores as
currency hits record low
Iranian traders and shopkeepers protested for a second day Monday after the country’s currency plummeted to 1.42 million to the US dollar. Many shut shop and asked others to do the same as prices of food and other daily necessities put further strain on household budgets.
Issued on: 29/12/2025
By: FRANCE 24
Iranian traders and shopkeepers staged a second day of protests Monday after the country’s currency plummeted to a new record low against the US dollar.
Videos on social media showed hundreds taking part in rallies in Saadi Street in downtown Tehran as well as in the Shush neighborhood near Tehran's main Grand Bazaar, which played a crucial role in the 1979 Islamic Revolution that ousted the monarchy and brought Islamists to power.
Witnesses told The Associated Press that traders shut their shops and asked others to do the same. The semiofficial ILNA news agency said many businesses and merchants stopped trading even though some kept their shops open.
There was no reports of police raids though security was tight at the protests, according to witnesses.
On Sunday, protest gatherings were limited to two major mobile market in downtown Tehran, where the demonstrators chanted anti-government slogans.
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Iran's rial on Sunday plunged to 1.42 million to the dollar. On Monday, it traded at 1.38 million rials to the dollar.
The rapid depreciation is compounding inflationary pressure, pushing up prices of food and other daily necessities and further straining household budgets, a trend that could worsen by a gasoline price change introduced in recent days.
According to the state statistics center, inflation rate in December rose to 42.2% from the same period last year, and is 1.8% higher than in November. Foodstuff prices rose 72% and health and medical items were up 50% from December last year, according to the statistics centre. Many critics see the rate a sign of an approaching hyperinflation.
Reports in official Iranian media said that the government plans to increase taxes in the Iranian new year that begins March 21 have caused more concern.
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Iran’s currency was trading at 32,000 rials to the dollar at the time of the 2015 nuclear accord that lifted international sanctions in exchange for tight controls on Iran’s nuclear programme. That deal unraveled after US President Donald Trump unilaterally withdrew the United States from it in 2018.
There is also uncertainty over the risk of renewed conflict following June’s 12-day war involving Iran and Israel. Many Iranians also fear the possibility of a broader confrontation that could draw in the United States, adding to market anxiety.
In September, the United Nations reimposed nuclear-related sanctions on Iran through what diplomats described as the “snapback” mechanism. Those measures once again froze Iranian assets abroad, halted arms transactions with Tehran and imposed penalties tied to Iran’s ballistic missile programme.
(FRANCE 24 with AP)
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