Iran's central bank governor resigned on Monday, state TV reported, as protests erupted in Tehran and several other cities after the country’s currency plummeted to a record low against the US dollar.
Mohammad Reza Farzin, who was appointed in December 2022, is set to be replaced by former economy minister Abdolnaser Hemmati, who headed the central bank from 2018 to 2021, according to an official at the President's office.
Iranian traders and shopkeepers staged protests for a second day on Monday after the country’s rial plummeted to 1.42 million to the dollar on Sunday before recovering slightly to 1.38 million. Videos on social media showed hundreds of people taking part in rallies in Saadi Street in central Tehran and in the Shoush neighbourhood near the main Grand Bazaar.
The semi-official Ilna news agency said many businesses and merchants stopped trading, though some kept their shops open.
The deputy minister of interior, Ali Akbar Pourjamshidian, urged people to be patient and not be influenced by the “enemy's” suggestions. He said that all agencies, including the government, were seeking to solve the problems and fluctuations created in the market.
There were no reports of a police crackdown, though security was tight at the protests, witnesses said.
Currency chaos
On Sunday, protest gatherings were limited to two major mobile markets in central Tehran, where the demonstrators chanted anti-government slogans.
Mobile merchants said currency fluctuations were the main reason for their protests, as exchange-rate instability has left them unable to buy or sell, the Fars news agency reported.
The rapid depreciation is compounding inflationary pressure, pushing up prices of food and other daily necessities and further straining household budgets, a trend that could worsen after a change in petrol pricing introduced this month.
According to the state statistics centre, Iran's inflation rose to 42.2 per cent this month from the same period last year, and is 1.8 per cent higher than in November.
Food prices rose 72 per cent, and health and medical items were up 50 per cent from December last year. Many critics see the rate as a sign of approaching hyperinflation. Reports in official Iranian media that the government is planning to increase taxes in the Iranian new year, which begins on March 21, have heightened concern.
The reimposition of US sanctions in 2018 during President Donald Trump's first term has harmed Iran's economy by limiting its oil exports and access to foreign currency. The Iranian economy is at risk of recession, with the World Bank forecasting GDP will shrink by 1.7 per cent in 2025 and 2.8 per cent in 2026.
