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.