Iran Protests Erupt as Rial Crashes and Food Prices Soar
A record slide in the rial collided with punishing inflation, pushing bazaar closures into a wider national protest wave with mixed demands.
By TheMurrow Editorial
January 3, 2026
Key Points
- 1Record free-market rial lows near 1.38m–1.45m per dollar rapidly repriced imports, forcing bazaar merchants to close and strike.
- 2Protests spread from commercial hubs to dozens of cities and over 100 locations, despite verification hurdles under tight information controls.
- 3Punishing inflation—42.2% annually and sharp food spikes—turned economic shock into political fury as leaders vowed not to yield.
Iran’s latest unrest did not begin with a manifesto. It began with a number: the price of a dollar.
In late December 2025, Iran’s rial slid to record lows on the free market, with major outlets citing levels around 1.38 million to 1.45 million rials per US dollar. Within days, a currency chart became a social accelerant. Imported goods jumped, everyday necessities grew less predictable, and shopkeepers—the people who translate wholesale prices into daily life—started shutting their doors. Business & Money coverage
What followed was a familiar Iranian sequence, but with new intensity. Protests and strikes spread from commercial corridors and bazaars into a broader, looser national mobilization—reported variously as dozens of cities (The Guardian) and over 100 locations in 22 provinces (AP). Reuters called it the most significant unrest in three years. The details are hard to verify amid tight information controls, but the signal is difficult to miss.
“A currency crisis is never just a financial story. In Iran, it becomes a referendum on the state’s competence.”
— — TheMurrow Editorial
Iran’s leaders insist they will not yield. Protesters insist they cannot endure. Between those positions lies a country where prices move faster than paychecks—and where the bazaar, long a barometer of stability, is again sending a warning.
Key Insight
The protests’ immediate trigger was economic—an exchange-rate shock—but the fallout quickly became political as volatility hit food, trade, and daily life.
The spark: a rial crash that hit the street overnight
Currency crises often sound abstract until they hit a checkout counter. Iran’s late-December plunge in the free-market exchange rate quickly became a lived experience. AP reported the rial reaching about 1.38 million per US dollar at a record low. The Financial Times cited roughly 1.45 million per dollar around the same period. Those differences are not trivial, but they are explainable: Iran operates with multiple exchange rates, and the free-market rate can swing rapidly even within a single day. more economic explainers
Why exchange-rate numbers vary—and why it matters
Different snapshots can produce different headlines, but the underlying reality is consistent: the rial weakened sharply, and the shock traveled straight into prices. In an import-dependent economy, a collapsing currency functions like a tax on everything that crosses a border—medicine components, spare parts, cooking oil, animal feed, electronics.
Merchants are often the first to feel the squeeze because they must make decisions in real time: restock now at a higher price, or wait and risk empty shelves. That uncertainty is itself destabilizing. EFE reported bazaar shopkeepers and merchants closing in several cities, pressing for currency stabilization and conditions that allow trade to function.
Merchants are often the first to feel the squeeze because they must make decisions in real time: restock now at a higher price, or wait and risk empty shelves. That uncertainty is itself destabilizing. EFE reported bazaar shopkeepers and merchants closing in several cities, pressing for currency stabilization and conditions that allow trade to function.
“When the rial falls fast enough, the most rational business decision can be to stop selling.”
— — TheMurrow Editorial
A case study in how the shock spreads: staples and substitutions
The Wall Street Journal noted rice rising more than 20% “recently” amid the currency turmoil. Rice is not just a line item; it’s a substitute good. When meat becomes unaffordable, households lean on rice. When rice climbs, the ladder of coping strategies loses rungs.
AP also reported food-price surges around 72% (the precise time basis isn’t specified in the excerpted reporting), capturing what many Iranians experience: even if overall inflation is already high, food inflation is the political accelerant. People can postpone buying a phone. They cannot postpone dinner.
AP also reported food-price surges around 72% (the precise time basis isn’t specified in the excerpted reporting), capturing what many Iranians experience: even if overall inflation is already high, food inflation is the political accelerant. People can postpone buying a phone. They cannot postpone dinner.
1.38m–1.45m
Late-Dec 2025 free-market exchange-rate range cited for rials per US dollar (AP/FT), reflecting multiple rates and intraday swings.
72%
Reported food-price surge figure cited by AP (time basis not fully specified in the excerpted reporting).
20%+
WSJ-reported recent rise in rice prices amid currency turmoil, underscoring how staple substitutions can fail under pressure.
From bazaar shutters to street protests: who moved first, and why
Iran has a long history of protests sparked by economics and broadened by politics. The current wave shows that pattern again, beginning with merchants and shopkeepers whose livelihoods depend on stable inputs and predictable consumer demand. According to EFE, bazaar and commercial centers played a prominent role in early mobilization, using closures and work stoppages as a form of leverage.
The bazaar’s political weight is structural, not symbolic
The bazaar is not merely a marketplace; it is a network of wholesalers, retailers, lenders, and informal social insurance. When shopkeepers close en masse, they create a visible indicator of distress—and a logistical problem for the state, which depends on normal commerce to project normalcy.
Several reports describe early actions centered on commercial districts. AP’s broader tally—protests across more than 100 locations in 22 provinces—suggests the movement quickly exceeded a single class or profession. Reuters highlighted unrest particularly in western provinces, while The Guardian described demonstrations across dozens of cities, echoing earlier slogans.
Several reports describe early actions centered on commercial districts. AP’s broader tally—protests across more than 100 locations in 22 provinces—suggests the movement quickly exceeded a single class or profession. Reuters highlighted unrest particularly in western provinces, while The Guardian described demonstrations across dozens of cities, echoing earlier slogans.
Students and youth: economic pain, political language
The Guardian reported participation by younger Iranians and noted continuity with prior protest rhetoric—an important clue to how the meaning of protests evolves. Economic grievances bring people out; shared political language helps them stay out.
The mix also changes the state’s response calculus. A merchant strike can be framed as a “business dispute.” A youth-led street protest is more easily framed as political defiance. Many movements in Iran move from one to the other, because the underlying question becomes difficult to avoid: if the economy cannot be stabilized, who is responsible?
The mix also changes the state’s response calculus. A merchant strike can be framed as a “business dispute.” A youth-led street protest is more easily framed as political defiance. Many movements in Iran move from one to the other, because the underlying question becomes difficult to avoid: if the economy cannot be stabilized, who is responsible?
“Every price spike is a political argument—made without words.”
— — TheMurrow Editorial
Editor’s Note
Reports differ on city counts and participation levels; verification is difficult amid tight information controls, shifting definitions, and restricted connectivity.
The inflation backdrop: numbers that explain the anger
The rial’s fall did not land on an otherwise stable economy. Official inflation was already punishing. Iran’s Statistical Center (SCI), as reported by PressTV/IFP, put 12‑month inflation at about 42.2% for the period ending December 21, 2025. The same report cited month-on-month CPI rising 4.2%, with food, beverages, and tobacco up 5.5% month-on-month.
Those are not abstract macroeconomic figures; they describe the pace at which households must renegotiate life. A 4.2% jump in one month, if sustained, compounds rapidly. Even if it isn’t sustained, it trains consumers to expect the next increase—and that expectation can reshape markets through hoarding, early buying, and price speculation.
Those are not abstract macroeconomic figures; they describe the pace at which households must renegotiate life. A 4.2% jump in one month, if sustained, compounds rapidly. Even if it isn’t sustained, it trains consumers to expect the next increase—and that expectation can reshape markets through hoarding, early buying, and price speculation.
Key statistics readers should hold onto
- Free-market exchange rate low: roughly 1.38m–1.45m rials per US dollar (late December 2025, AP/FT).
- Official 12‑month inflation: about 42.2% (SCI via PressTV/IFP, period ending Dec 21, 2025).
- Monthly CPI increase: +4.2% (SCI via PressTV/IFP).
- Monthly food-group increase: +5.5% (SCI via PressTV/IFP).
- Reported food-price surge: about 72% (AP; basis not fully specified in the excerpt).
- Illustrative staple shock: rice up 20%+ recently (WSJ).
- Official 12‑month inflation: about 42.2% (SCI via PressTV/IFP, period ending Dec 21, 2025).
- Monthly CPI increase: +4.2% (SCI via PressTV/IFP).
- Monthly food-group increase: +5.5% (SCI via PressTV/IFP).
- Reported food-price surge: about 72% (AP; basis not fully specified in the excerpt).
- Illustrative staple shock: rice up 20%+ recently (WSJ).
42.2%
SCI-reported 12-month inflation (via PressTV/IFP) for the period ending Dec 21, 2025—already punishing before the late-Dec exchange-rate shock.
+5.5%
SCI-reported month-on-month rise in food, beverages, and tobacco (via PressTV/IFP), highlighting why food inflation intensifies unrest.
Why food inflation breaks politics faster than headline inflation
Governments can sometimes survive high inflation when it is uneven or confined to particular sectors. Food is different. It is universal and frequent. Food prices also generate daily reminders of loss—loss of purchasing power, dignity, and control.
Merchants, in turn, face accusations from customers and scrutiny from authorities, even when the root cause is currency weakness. That dynamic can place shopkeepers in an untenable position: blamed by the public, pressured by the state, and squeezed by suppliers.
Merchants, in turn, face accusations from customers and scrutiny from authorities, even when the root cause is currency weakness. That dynamic can place shopkeepers in an untenable position: blamed by the public, pressured by the state, and squeezed by suppliers.
Geography, scale, and the information problem
A striking feature of this protest wave is how widely it is reported to have spread—alongside how hard it is to measure precisely. AP’s reporting window captured protests in over 100 locations across 22 provinces. The Guardian emphasized dozens of cities. Reuters described the unrest as the most significant in three years, with western provinces particularly mentioned.
These aren’t simply contradictory accounts. They reflect the challenge of counting under conditions where:
- definitions differ (a single city vs. multiple neighborhoods; a strike vs. a street protest),
- videos and eyewitness accounts can be harder to verify,
- authorities may restrict internet access or apply pressure that limits reporting.
These aren’t simply contradictory accounts. They reflect the challenge of counting under conditions where:
- definitions differ (a single city vs. multiple neighborhoods; a strike vs. a street protest),
- videos and eyewitness accounts can be harder to verify,
- authorities may restrict internet access or apply pressure that limits reporting.
Why scale matters beyond headlines
Scale influences state strategy. A protest contained to a few districts can be met with targeted policing. A movement spanning many provinces forces harder choices: repression becomes more visible, and concessions can encourage more demands.
Scale also affects the economy directly. Strikes and closures amplify uncertainty. If merchants believe the rial will fall further, some may delay sales or price in additional risk. If consumers believe prices will rise tomorrow, they rush to buy today. Both behaviors—rational in isolation—can deepen scarcity and instability.
Scale also affects the economy directly. Strikes and closures amplify uncertainty. If merchants believe the rial will fall further, some may delay sales or price in additional risk. If consumers believe prices will rise tomorrow, they rush to buy today. Both behaviors—rational in isolation—can deepen scarcity and instability.
A real-world example: how rumors become economic forces
In a volatile currency environment, even unverified rumors can move markets. A whisper of a coming subsidy change, a rumored import restriction, or an expectation of tougher enforcement can prompt merchants to adjust prices immediately. The result is a society where people argue not only about politics but about what reality will look like next week.
What protesters are demanding—and how economic protest turns political
Early reporting emphasizes the economic origins: currency stabilization, relief from price volatility, and conditions that allow everyday commerce. EFE’s account of merchant-led actions reflects this plainly. When the exchange rate collapses, the complaint is not ideological; it is logistical. A shop cannot function when replacement stock costs more every morning.
Yet Iran’s protest history shows how quickly the frame can change. The Guardian noted slogans and mood echoing previous waves, suggesting that many participants interpret economic breakdown as evidence of political failure.
Yet Iran’s protest history shows how quickly the frame can change. The Guardian noted slogans and mood echoing previous waves, suggesting that many participants interpret economic breakdown as evidence of political failure.
Two narratives are competing in the street
1. A “fix the economy” narrative: stabilize the rial, control prices, reduce uncertainty.
2. A “fix the system” narrative: economic pain is a symptom, not the disease.
Both can coexist. A shopkeeper may want stability, not revolution. A student may see stability as impossible without political change. In the same crowd, these views can overlap without merging.
2. A “fix the system” narrative: economic pain is a symptom, not the disease.
Both can coexist. A shopkeeper may want stability, not revolution. A student may see stability as impossible without political change. In the same crowd, these views can overlap without merging.
Practical implications for outsiders watching Iran
For policymakers, businesses, and analysts, the key takeaway is that economic indicators are no longer merely descriptive; they are mobilizing. A currency chart can set the protest calendar. Food inflation can dictate the intensity of street anger. And strikes in commercial hubs can create downstream shortages that feed back into the protest’s rationale.
What’s driving the protest cycle, per reported indicators
- ✓Free-market exchange-rate shocks that reprice imports overnight
- ✓Food inflation that hits households daily and universally
- ✓Bazaar closures and strikes that amplify uncertainty and disrupt supply
- ✓Information constraints that make verification hard and rumors potent
The state’s response: rhetoric, policing, and the red line
Iran’s leadership has sought to separate legitimate hardship from illegitimate dissent. Reuters reported that Supreme Leader Ayatollah Ali Khamenei addressed the unrest by distinguishing between “legitimate” economic complaints and “rioters,” while signaling support for firmer measures and a refusal to yield.
That rhetorical split is a classic governing tactic in crisis: validate suffering while delegitimizing protest as disorder. The challenge is credibility. When inflation is official and ubiquitous, and when the currency’s value is visible to anyone with a phone, blaming “rioters” for economic pain risks sounding like evasion. Breaking News updates
That rhetorical split is a classic governing tactic in crisis: validate suffering while delegitimizing protest as disorder. The challenge is credibility. When inflation is official and ubiquitous, and when the currency’s value is visible to anyone with a phone, blaming “rioters” for economic pain risks sounding like evasion. Breaking News updates
Policing tactics and their effects
Multiple outlets reported the use of tear gas to disperse crowds. Policing is not only a security action; it is a communications strategy. The state aims to demonstrate control. Protesters aim to demonstrate persistence.
Harsh dispersals can produce short-term quiet while deepening long-term resentment. Leniency can prevent escalation while signaling weakness. The state’s stance, as reported by Reuters, suggests it prefers deterrence and endurance over concession.
Harsh dispersals can produce short-term quiet while deepening long-term resentment. Leniency can prevent escalation while signaling weakness. The state’s stance, as reported by Reuters, suggests it prefers deterrence and endurance over concession.
The government’s dilemma: stability requires trust
Currency stability is not achieved by decree alone. It depends on expectations. If citizens and merchants expect further deterioration, they behave accordingly: converting savings, stocking goods, pricing defensively. Restoring trust requires policy credibility, and credibility is harder to establish when the street believes the leadership has chosen confrontation over repair.
What comes next: plausible trajectories without pretending to predict
Iran’s recent unrest sits at the intersection of three forces documented in reporting: a currency shock, high inflation, and a protest ecosystem that can scale quickly. No serious analysis should pretend to forecast exact outcomes, especially amid limited verified information. Still, the available evidence suggests several near-term realities.
The economy will continue to shape the protest tempo
If the rial remains unstable on the free market, merchants may continue intermittent closures. Each new lurch in the exchange rate risks another wave of anger, especially if it lands on food and medicine.
Protest composition will likely remain mixed
Merchant actions have different rhythms than student demonstrations. Strikes can be planned; street protests can be spontaneous. That mix makes the movement harder to contain—and also harder to unify behind a single list of demands.
The state’s “won’t yield” posture raises the stakes
Khamenei’s reported refusal to yield signals a preference for durability over bargaining. That may suppress visible protest in some areas while pushing anger into quieter forms: work slowdowns, informal boycotts, or short, sudden demonstrations that are harder to pre-empt.
The deeper question for Iran is not whether it can disperse a crowd. It is whether it can offer a credible path back to economic predictability. A currency is, at heart, a social agreement. When that agreement frays, the street begins to argue about everything else.
The deeper question for Iran is not whether it can disperse a crowd. It is whether it can offer a credible path back to economic predictability. A currency is, at heart, a social agreement. When that agreement frays, the street begins to argue about everything else.
T
About the Author
TheMurrow Editorial is a writer for TheMurrow covering world news.
Frequently Asked Questions
What triggered the Iran protests in late 2025 and early 2026?
Reporting from AP and others points to an immediate trigger: a sharp collapse in the rial’s free-market exchange rate, which quickly raised prices for imported goods and everyday necessities. Shopkeepers and bazaar merchants were prominent in early actions, including closures, as price volatility made ordinary commerce difficult.
How low did the Iranian rial fall against the US dollar?
Outlets cited slightly different record-low points in late December 2025: AP reported around 1.38 million rials per US dollar, while the Financial Times reported about 1.45 million. Differences are common because Iran has multiple exchange rates and the free-market rate can swing rapidly.
How widespread are the protests?
Accounts vary. AP reported protests across over 100 locations in 22 provinces during its reporting window. The Guardian described protests spreading to dozens of cities, while Reuters characterized the unrest as the most significant in three years, with particular mention of western provinces. Counting is difficult under information constraints.
What is Iran’s inflation rate right now?
Iran’s Statistical Center (SCI), as reported by PressTV/IFP, put 12‑month inflation at about 42.2% for the period ending December 21, 2025. The same report cited month-on-month CPI rising 4.2%, with food, beverages, and tobacco up 5.5% month-on-month.
Why are bazaar merchants and shopkeepers central to this unrest?
Merchants sit at the point where exchange rates become consumer prices. When the rial drops quickly, restocking becomes risky and prices can change daily. EFE reported shopkeepers closing in several cities, pressing for currency stabilization and predictable trading conditions—economic demands that can rapidly become political in Iran’s protest context.
What has Iran’s leadership said about the protests?
Reuters reported that Ayatollah Ali Khamenei drew a line between legitimate economic complaints and “rioters,” and indicated Iran would not yield to protests. That framing attempts to validate hardship while delegitimizing street mobilization, even as the government relies on security measures to restore calm.
