Since late December 2025, protests have spread across Iran in what analysts describe as the largest wave of unrest since the 2022 Mahsa Amini demonstrations. Triggered by a rapid depreciation of Iran’s currency, the protests began with shopkeepers closing down their businesses but quickly escalated into street protests, student demonstrations, and clashes with security forces across multiple provinces.
Reports suggest that slogans targeting the government and Supreme Leader Ayatollah Ali Khamenei have been raised by protesters in Tehran, Isfahan, Shiraz, Mashhad, Lorestan, Khuzestan, Hamadan, and Fars. Tehran’s Grand Bazaar, a commercial hub employing tens of thousands and historically a political bellwether, shut down continually as merchants protested the collapse of purchasing power.
For the first time in over five decades, pro-monarchy slogans have appeared prominently during nationwide unrest. Protesters in Bandar Abbas chanted “Death to the entire system” and “Long live the Shah,” while pro-monarchy graffiti and slogans appeared in Esfahan, Sistan and Baluchestan.
According to international reporting, at least six protesters and one member of the security forces have been killed, many more were injured, and several were arrested. Witnesses reported the use of live ammunition and tear gas in some locations. Iranian authorities have acknowledged deaths but denied any responsibility, while internet disruptions have made independent verification difficult.
The Immediate Trigger: Why the Rial Fell?
In late December of 2025, the rial fell to a historic low of around 1.4 million rials to the US dollar on the open market, before slightly recovering to roughly 1.35 million.
Dollar demand surged as inflation eroded savings and wages lost significant value. Households and businesses rushed to protect what they had by buying dollars or gold. Since many prices in Iran are directly or indirectly tied to the dollar, this behaviour is both rational and self-reinforcing. As economist Mohammad Kohandal told Tasnim News Agency, “As long as inflation remains a chronic problem in the economy, expecting a stable exchange rate is not realistic.”
Sanctions linked to Iran’s nuclear programme have restricted oil exports and limited access to international banking, reducing the country’s ability to earn and move foreign currency. This isolation added pressure on the rial, though poor government policies amplified the damage. In December, authorities permitted importers of essential goods to tap the open currency market instead of subsidised channels.
Inflation had already entrenched expectations of further price rises. The Statistical Center of Iran reported point-to-point inflation at 52.6% in late December, up 3.2% from the previous month, while average annual inflation climbed to 42.2%. This sustained cost-of-living strain pushed households to seek refuge in dollars, further accelerating the currency’s fall.
Security and political uncertainty deepened the pressure. The risk of regional tensions, combined with public warnings by Iranian officials of possible Western sanctions, reinforced concerns that access to foreign currency would tighten further. Fears of escalation involving Iran and Israel, stalled nuclear diplomacy, and weakening confidence in the economy accelerated the sell-off of the rial in informal markets.
The effects were immediate. Prices of staple foods such as rice, cooking oil, and meat jumped sharply, as did the cost of imported medicines and medical supplies. Traders found it increasingly difficult to price goods or restock inventory without losses, as replacement stock cost far more than existing prices.
Protesters’ Demands
The demands raised by groups participating in the protests broadly fall into three intersecting categories. First is immediate economic relief, including currency stabilisation, protection against inflation, and lower prices. Second is governance reform, with calls for accountability and transparency to curb corruption. Third is political change, questioning the legitimacy of the ruling system. While protesters differ on end goals, the economic crisis has created a shared space where diverse grievances converge.
The Government’s Response
President Masoud Pezeshkian said he had instructed the interior minister to listen to protesters’ “legitimate demands”. Government spokesperson, Fatemeh Mohajerani, announced that a dialogue mechanism would be established, including talks with protest leaders, acknowledging that the protests stem from the pressure on livelihoods. However, authorities have not clarified how dialogue would be structured or which groups would be recognised as interlocutors.
Iran has repeatedly suppressed protest movements, including demonstrations over bread price hikes in 2022 and the nationwide unrest following the death of Mahsa Amini in morality police custody, through mass arrests and violent crackdowns.
Officials simultaneously called for control and unity. Pezeshkian appealed for national solidarity and blamed foreign pressure for the unrest, describing the situation as a “full-scale war” waged through economic means. Security forces responded with force in several provinces. A paramilitary officer was reported killed in Lorestan, and security forces in Fars province allegedly opened fire on protesters attempting to enter a local government building.
Economic pressure remains severe. Central bank governor Mohammad Reza Farzin resigned amid pressure linked to recent economic liberalisation that exposed the currency to sharp declines in the open market. The crisis has been exacerbated by Iran’s dual exchange-rate system, under which large businesses and select importers retain access to official channels at a managed rate while ordinary Iranians are pushed into the weaker open market and forced to absorb higher import costs.
President Pezeshkian has said his government aims to end the use of a heavily subsidised exchange rate, arguing that it has failed to protect households and instead fuelled corruption.
The Iranian government’s response, including enforcing security measures with limited economic relief and calling for dialogue, remains futile. Without restoring confidence in livelihoods, institutions, and governance, the underlying drivers of dissent will persist. Iran’s economic shock has slipped decisively into the social sphere, and it is unmistakably political.