Protests broke out in Tehran and other Iranian cities on Monday after the rial slid to a record low and prices kept climbing. The annual inflation rate reached 42.2% in December, while the currency traded around 1.42 million rials per dollar at its worst and about 1.38 million on Monday, according to Associated Press reporting carried by CNN.
The immediate catalyst was household pain colliding with visible market stress. Shopkeepers and traders reportedly shut stores in parts of Tehran’s bazaar districts, and police used tear gas in some areas. The political system also signaled urgency. Iran’s central bank chief Mohammad Reza Farzin resigned, and local media said Abdolnaser Hemmati was set to replace him, per The New York Times.
Why now. The slide is being driven by a mix of sanctions pressure and renewed conflict risk. The currency was around 32,000 per dollar at the time of the 2015 nuclear accord, but the deal unraveled after the U.S. withdrawal in 2018. More recently, the U.N. reimposed nuclear-related sanctions via a “snapback” mechanism in September, and markets remain jittery after June’s 12-day war involving Iran and Israel, as noted in the same AP account.
Likely next steps include short-term stabilization attempts. That could mean tighter FX controls, efforts to manage expectations around fuel prices and taxes, and a credibility test for the incoming central bank leadership as Parliament debates the 2026 budget. For readers, the key is contagion risk. A sharper Iran crisis can spill into energy markets and regional security, even if day-to-day global growth is resilient. Track whether protests broaden and whether policymakers can slow the FX slide without choking domestic activity.
