Iran is facing a fast-moving wave of unrest driven by a dramatic plunge in the rial and surging prices. Shopkeepers and traders have shuttered parts of Tehran’s commercial districts, and protest gatherings have been reported in multiple cities. In some locations, security forces have used crowd-control measures, including tear gas. The government has responded by changing central bank leadership and urging officials to engage with protesters’ demands.
1) What is happening in Iran right now?
Iran is seeing economic protests and strikes linked to a sharp currency slide and high inflation. Demonstrations have continued into a second day in Tehran and have been reported elsewhere. The unrest has concentrated around market areas, where merchants have closed shops in protest as exchange-rate volatility disrupts pricing and trade.
2) What sparked the protests?
The immediate trigger is the rial’s plunge to record lows on the open market, intensifying fears of further price spikes for essentials. Broader concerns include rising living costs and policy shifts that can fuel inflation—such as fuel pricing adjustments—along with public anxiety over a tighter, tax-heavier budget debate.
3) When did the current wave begin, and how fast is it spreading?
The latest round began on Dec. 28 in downtown Tehran near major retail hubs. By Dec. 29 it expanded into larger gatherings, including areas near the Grand Bazaar and other central districts. Reports suggest similar protests or strike activity in several other cities and locales, indicating a wider spread of discontent.
4) How severe is the rial collapse—what numbers matter?
On the open market, the rial fell to around 1.42 million per U.S. dollar at its weakest point, before trading closer to roughly 1.38–1.41 million in subsequent quotes—underscoring extreme volatility. A persistent gap between official exchange mechanisms and the street rate has added to market dysfunction, leaving many people unable to price goods reliably from one day to the next.
5) What does inflation look like, and what is happening to household costs?
Inflation remains high, with sharp increases in the cost of basic necessities. Food and healthcare costs have risen far faster than wages for many households, intensifying pressure on family budgets and contributing to anger among small business owners and consumers alike.
6) Is Iran’s economy shrinking as well as inflating?
Yes. Recent reporting points to contraction in major sectors, including agriculture, industry/mining, and especially construction—an employment-heavy sector that affects many related industries. The combination of weak growth and high inflation has deepened the sense of a broad cost-of-living crisis.
7) Who is protesting, and what are people saying in the streets?
Much of the visible protest activity has involved traders and shopkeepers, particularly in Tehran’s commercial corridors, where many shut stores and rallied in groups. While many chants focus on economic hardship, some demonstrations have included overtly political slogans, signaling that economic anger can quickly merge with broader political frustration.
8) How have security forces responded?
Reports describe heavy deployments of anti-riot forces in central Tehran and the use of tear gas to disperse crowds in some places. Videos and eyewitness accounts also indicate clashes as security forces attempted to break up gatherings.
9) What is the government doing—and why did the central bank governor resign?
Amid the turmoil, state media reported the resignation of Central Bank Governor Mohammad Reza Farzin, with Abdolnaser Hemmati named as his replacement. President Masoud Pezeshkian has publicly framed livelihoods and inflation as urgent priorities and has said officials were instructed to engage with protesters’ representatives—pairing public outreach with continued security measures on the streets.
10) How does the budget fight in parliament connect to the unrest—and what happens next?
The protests are unfolding alongside a contentious debate over Iran’s next-year budget. Critics argue that proposed fiscal measures—particularly large increases in expected tax intake—risk squeezing households further at a time when inflation is already punishing purchasing power. Lawmakers have raised objections to key assumptions in the budget framework, adding political strain to an already volatile economic moment.
What happens next will depend on whether the currency stabilizes, whether prices ease or continue rising, and whether the government can restore confidence quickly. If conditions worsen, protests could broaden beyond merchant communities; if the rial steadies and authorities deliver credible relief, unrest may cool temporarily—though the underlying economic pressures would remain.
Key numbers at a glance (reported figures)
- Rial (open market): roughly 1.42 million per USD at the low point; later quotes near 1.38–1.41 million
- Annual inflation (December): 42.2%
- Food prices: up 72% year over year; Health/medical items: up 50% year over year
- Sector contraction (reported): Agriculture -2.9%; Industry/mining -3.4%; Construction -12.9%
Photo: The New York Times