tehran21 minutes ago
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Thousands of people took to the streets on Monday against rising inflation and currency crisis in Iran. This is being said to be the biggest demonstration in the last three years. Meanwhile, Central Bank chief Mohammad Raza Farzin resigned from his post.
Traders and shopkeepers demonstrated in Saadi Street and Grand Bazaar area of the capital Tehran. Shops remained closed at many places, due to which business came to a standstill. According to eyewitnesses, protests also took place in major cities such as Isfahan, Shiraz and Mashhad.
The demonstrations intensified when Iran’s currency Rial reached a record low against the dollar. Due to this, the prices of food items and everyday items increased further.
According to government data, the inflation rate in December was more than 42 percent, while the prices of food items have increased by more than 70 percent.
Photos of demonstration in Iran…
Thousands of protesters took to the streets of Iran against rising inflation.
Biggest performance in three years
These demonstrations are considered to be the biggest after 2022. Protests broke out across the country after the death of 22-year-old Mahsa Amini in police custody. She was caught by the morality police for not wearing hijab properly.
On Monday, when the situation got out of control in some areas of Tehran, the police used tear gas to disperse the protesters. The protesters also raised slogans against the government.
Police fired tear gas shells at the protesters.
Historic decline in Iran’s currency Rial
On Sunday, Iran’s currency had fallen to 14.20 lakh riyals against 1 dollar. There was a slight improvement in it on Monday and it reached 13.80 lakh riyals per dollar.
Inflation has increased further due to sharp fall in currency. Food items and everyday items are continuously becoming expensive.
The situation is likely to worsen due to recent changes in petrol prices. Many experts are considering this as a sign of moving towards hyperinflation.
Iranian media reports said that the government may increase taxes in the new Iranian year starting on March 21, which has further increased people’s concerns.
Iran’s trade and relations with the world tense
Iran’s economy has faced many challenges since the Islamic Revolution of 1979. The main reason why inflation rate is continuously increasing is the increase in imports and less exports.
Due to this the price of Riyal continued to fall. The situation became so bad in 2023 that inflation overtook even devaluation of the rial. Devaluation makes a country’s currency cheaper, making its products cheaper for foreign buyers and increasing demand for exports.
International sanctions deepened the foreign exchange shortage. Iran’s trade and relations with the world remained tense. Political isolation further weakened the economy, causing the value of the rial to further decline.
America has imposed sanctions
America has imposed many sanctions on Iran due to nuclear programs and security reasons. The Trump administration adopted a ‘maximum pressure’ policy against Iran, imposing stringent sanctions on oil exports, banking, and shipping. Also punished the companies purchasing Iranian oil.
UN sanctions extend further restrictions on Iran’s weapons programs until October 2025. Due to these restrictions, foreign banking transactions became difficult, foreign currency like dollars and euros became scarce, imports became expensive and limited. Also investment and trade were affected.
Iran’s economy depends on oil export
Iran’s total exports in 2024 were about $22.18 billion, with oil and petrochemicals accounting for the bulk, while imports stood at $34.65 billion, pushing the trade deficit to $12.47 billion.
This deficit is expected to increase further to $15 billion in 2025 due to reduction in oil exports and restrictions. Main trading partners include China (35% of exports), Türkiye, UAE and Iraq. Iran exports 90% of its oil to China.
Iran has sought to increase trade with neighboring countries and the Eurasian Economic Union, such as through the INSTC corridor and new transit routes with China. Yet, GDP growth is projected to be only 0.3% in 2025. Without the lifting of sanctions or the restoration of the nuclear deal, it will be difficult to stabilize trade and the value of the riyal.
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