Protests in Iran as the Rial Hits Record Lows and the Bazaar Pushes Back
As of December 30, 2025, protests are being reported in Iran after the rial fell to fresh record lows against the U.S. dollar on the open market. What began as a currency story is now a street-level one, with traders and shopkeepers—especially around Tehran’s commercial districts—signalling that daily commerce is becoming impossible to price, stock, or plan.
The central tension arises from the dual demands placed on Iran's leaders. They are expected to stabilise the currency quickly while also absorbing public anger over living expenses that have been rising for years. When the people who are protesting are the ones who move goods through the economy, disruption can spread faster than slogans.
This piece explains what changed, why the rial slide is feeding protests now, how the state’s options are constrained, and what signs would show whether Iran is heading toward stabilization—or wider unrest.
The narrative revolves around Iran's ability to stop the rial's decline without instigating a wider crisis of legitimacy.
Key Points
Tehran and other major cities have reported protests following the rial's new record lows on the open market in late December 2025. The size and spread are difficult to verify in real time, but multiple independent reports point to multi-city activity.
Shopkeepers and traders have played a visible role, including closures and stoppages in key commercial areas. That matters because a “market strike” can choke supply as well as signal political dissent.
The resignation of the central bank chief has added to the sense of emergency, even if leadership changes do not solve the underlying shortage of hard currency.
Inflation remains high by official measures, with sharp increases in food and household essentials. Currency weakness pushes import costs up quickly, and the public feels it in days, not quarters.
Iran’s policy tools are limited by sanctions, restricted access to foreign currency, and domestic distrust in official rates versus the street rate used by ordinary households.
Near-term outcomes range from a managed currency stabilization to deeper volatility that turns economic protest into explicitly political mobilization.
Background: Protests in Iran and the Currency Slide
Iran’s currency has been weakening for years, but the current moment is defined by speed and psychology. In late December, the rial hit new lows on the open market—where ordinary Iranians seek dollars and other hard currencies to protect savings and pay for imports that ultimately show up in shops.
Iran’s currency system is not a single, clean price. There are typically multiple rates: a state-managed rate used for parts of the formal economy and a market rate that sets the tone for real-life purchasing power. When that gap widens, trust collapses. People stop believing official prices, and businesses stop believing they can restock at anything close to yesterday’s cost.
That dynamic hits traders first. Merchants who sell imported electronics, spare parts, medicines, or even packaging materials often have to make a difficult decision: either raise prices to a point where customers cannot afford them, or close their doors and wait. Either path produces anger—at sellers, at authorities, and at the overall system.
This is why the bazaar matters. Tehran’s main markets are not just retail. They are distribution arteries. When they slow down, shortages can spread to smaller cities quickly, and inflation can jump again because scarcity becomes the story.
Political and Geopolitical Dimensions
Iran’s economic distress is inseparable from geopolitics. Sanctions restrict oil revenue, complicate trade finance, and reduce access to foreign reserves. Even when Iran finds ways to export, the frictions and discounts can still leave the state short of the hard currency needed to stabilize the exchange rate convincingly.
Inside the country, protests tied to economic pain are politically sensitive because they can widen beyond “prices” into questions of competence and legitimacy. The state can repress demonstrations, but it cannot police a functioning market into existence. If traders and households believe the rial will keep falling, they will keep trying to escape it—and that behavior can overpower announcements and arrests.
Two paths can emerge quickly. One is a controlled de-escalation: dialogue with merchants, visible policy changes, and enough market stabilization to get shops open again. The other is escalation: tougher policing, more closures, deeper shortages, and wider protests as different groups join in.
A key swing factor is whether elites stay unified. Leadership changes at the central bank can be read as accountability—or as a sign the government is out of options.
Economic and Market Impact
A falling currency does not just make imported goods pricier. It breaks pricing. If a shopkeeper cannot predict replacement cost, selling inventory becomes risky. Many will prefer to hold stock, hold dollars, or hold nothing.
That creates a feedback loop:
The rial falls, so sellers pause.
Pauses create scarcity, pushing prices up.
Higher prices fuel more currency flight.
More currency flight weakens the rial again.
Official efforts can blunt this only if they change expectations. A new central bank chief, a crackdown on street trading, or a temporary injection of foreign currency can buy time. But unless the public believes the underlying hard-currency supply is improving, the relief tends to be short-lived.
There is also a distributional angle. Those with access to preferential rates, connections, or assets like gold can protect themselves. Those paid in rials—public-sector workers, many private employees, pensioners—feel the squeeze immediately. That inequality sharpens resentment, especially when salaries lag behind price spikes.
Social and Cultural Fallout
Economic protests often look “non-ideological” at first: merchants demanding stability, households demanding affordability, workers demanding wages that keep up. But the longer volatility lasts, the more it touches dignity and identity. In Iran, the memory of past crackdowns sits alongside the memory of past uprisings. People calibrate risk, watch the security response, and decide whether to stay home or join in.
The involvement of shopkeepers and traders is culturally and historically potent. Markets are communal spaces, not just commercial ones. When a market closes in protest, it sends a message that normal life is being suspended—by the state’s failure to deliver stability, not by the protesters’ choice.
If protests broaden beyond commercial districts into workplaces, universities, or transportation routes, the state’s challenge becomes much larger. If they remain concentrated among merchants, the government may try targeted concessions to reopen trade while containing broader mobilization.
Technological and Security Implications
The state’s immediate tools are security and information control: visible deployments, dispersal tactics, arrests, and pressure on organizers. Digital monitoring can make protests riskier to coordinate, while online footage can make them harder to deny and easier to replicate.
However, technology has both positive and negative effects. If the public believes unrest is widespread, fear can shift sides. If the public believes demonstrations are isolated, participation can fade. That makes perception management central, and it makes credibility critical. In a currency crisis, credibility is not a slogan—it is the difference between people holding rials for another week or abandoning them today.
What Most Coverage Misses
Most coverage frames this as “anger over prices.”. The deeper problem is a trade and planning freeze. When a currency loses a predictable floor, the economy can stop behaving like an economy and start behaving like a series of defensive moves: hoarding, delaying, dollarizing, and shutting down.
That is why the bazaar angle is not just symbolism. It is mechanical. Merchants shutting down can interrupt supply chains, which can create the next wave of inflation even if the exchange rate stabilizes briefly. In other words, the street rate can stop falling and life can still get more expensive, because the damage is already in the pipeline.
The second overlooked factor is trust in rate-setting itself. Multiple exchange rates and ad hoc rule changes can make everyone assume someone else is getting a better deal. That suspicion can be as destabilizing as any policy failure, because it turns every price into a political argument.
Why This Matters
In the short term, the greatest impact is on Iranian households and small businesses. Currency weakness translates into food inflation, higher medicine costs, and rising rents and transport expenses. The groups least able to adapt—those on fixed incomes or paid late—are hit hardest.
In the medium term, there is a risk that an economic protest wave could transform into a political disruption. If merchants, workers, and students begin aligning their demands, the state faces a coordination problem it cannot solve with targeted concessions.
In the longer term, persistent instability can reshape Iran’s regional posture. A government under intense domestic pressure may become more risk-acceptant abroad or more defensive and inward-looking. Either can raise volatility in a region already prone to shocks.
Concrete events to watch next include the formal acceptance of the central bank chief’s resignation and the naming of a successor, any announced changes to exchange-rate policy or import rules, and whether authorities pursue dialogue with merchant groups or rely primarily on security measures. Budget and tax signals tied to the next Iranian year, starting March 21, 2026, are another pressure point because they shape expectations about future living expenses.
Real-World Impact
A mobile-phone retailer in central Tehran closes early due to the hourly fluctuations in replacement stock costs. Customers accuse the shop of profiteering. The owner fears selling today means being unable to restock tomorrow.
A nurse in Shiraz watches the price of basic groceries jump again while wages stay fixed. Overtime becomes less of a choice and more of a survival tactic, and frustration spreads through the workplace.
A small manufacturer outside Isfahan that relies on imported components pauses production because suppliers will not quote stable prices. Workers are asked to take unpaid days, and the factory’s local economy tightens.
A family in Mashhad tries to convert savings into something safer—dollars, gold, durable goods—because holding rials feels like watching value evaporate. That household behavior, repeated at scale, feeds the wider slide.
What’s Next?
Iran’s immediate challenge is to restore a sense of predictability. That does not necessarily require a miraculous rebound in the rial. It requires a believable stop to the free fall—enough stability for merchants to price goods, for importers to sign orders, and for households to stop panic-buying hard currency.
Three near-term scenarios stand out. First is managed stabilization: a new central bank leadership team, some currency-market intervention, and credible steps to reduce the gap between official and street rates, paired with limited concessions to merchants to reopen trade. Second is continued volatility: a brief stabilization followed by renewed declines, more closures, and protests that spread beyond commercial districts. Third is enforced quiet: heavier security measures reduce visible protests, but the economic freeze deepens and pressure builds under the surface.
The clearest signs of which way the story is breaking will be practical, not rhetorical: whether shops reopen in major markets, whether merchants can quote prices for imported essentials without pausing sales, whether the street exchange rate stops making new lows for several consecutive days, and whether the state chooses dialogue with economic actors or leans mainly on dispersal and deterrence.
