Tensions have escalated in Iran as citizens and groups of merchants in Tehran and other major cities nationwide united to protest after the rial currency hit a record low of 1.42 million rials per U.S. dollar. This sharp drop led Mohammad Reza Farzin, the governor of Iran's central bank, to resign from his position to take responsibility.
Reports indicate that traders in key economic areas such as Saadi Street and the Chouch district near the Grand Bazaar—an important historic strategic site—closed their shops and gathered together. Protests were also reported in major cities including Isfahan, Shiraz, and Mashhad. In some parts of Tehran, police used tear gas to disperse crowds. This protest is the largest since the death of Mahsa Amini in 2022.
The Iranian rial plunged to 1.42 million rials per U.S. dollar on Sunday, 28 Dec 2023 GMT+7, before recovering slightly to 1.38 million on Monday. When Farzin assumed office in 2022, the rial was valued at only 430,000 rials per dollar.
The rapid depreciation directly impacted prices, with inflation in December soaring to 42.2% and food prices skyrocketing by 72% compared to the previous year. Healthcare costs also rose by 50%. Analysts warn Iran is entering a phase of "hyperinflation," worsened by planned tax increases for the new fiscal year starting in March and recent hikes in retail fuel prices.
Iran's economy is further strained by multiple security challenges, especially following the 12-day war with Israel in June and concerns over confrontations with the U.S. In September, the United Nations reinstated nuclear sanctions on Iran, resulting in the freezing of overseas assets and suspension of arms trade, closing off key economic lifelines for the country.
Currently, Iranians face severe hardship as the rial, which was 32,000 per dollar during the 2015 nuclear deal, has surged over 40 times higher since the U.S. withdrew from the agreement in 2018.