Iran’s currency collapse sparks mass protests as inflation spirals

In Short:
– Iranian President Pezeshkian urged action to meet protesters’ demands amid economic crisis and currency devaluation.
– Protests intensified with shop closures in Tehran, following significant inflation and political unrest after Mahsa Amini’s death.

Iran is grappling with its most severe economic crisis in years. Mass protests erupted across Tehran following the dramatic collapse of the national currency. The rial plunged to 1.42 million against the U.S. dollar over the weekend, briefly recovering to 1.38 million. This marks a loss of more than two-thirds of its value since 2022.

Annual inflation soared to 42.2 percent in December, with food prices up 72 percent year-on-year. Many Iranians are struggling to make ends meet, fueling public anger and unrest.

In response, Iranian President Masoud Pezeshkian ordered his government to engage directly with protest representatives. Calling the demonstrations “legitimate,” he emphasized the need for reforms in the monetary and banking sectors. Officials announced a dialogue framework to hear the voices of demonstrators.

The unrest coincided with the resignation of Central Bank Governor Mohammad Reza Farzin. Former Economy Minister Abdolnaser Hemmati is set to replace him, signaling possible shifts in economic policy.

Tehran’s commercial districts were paralyzed as shopkeepers in the Grand Bazaar and major streets closed businesses in solidarity. Videos on social media showed crowds chanting slogans as security forces used tear gas to disperse them.

International pressure is also rising. U.S. officials warned they would support action against Iran if the country resumes nuclear or missile development, following recent airstrikes on Iranian facilities.

The World Bank forecasts Iran’s GDP will contract 1.7 percent in 2025 and 2.8 percent in 2026, deepening economic concerns. How the government responds to these protests and reforms its economy may shape the country’s stability in the months ahead.