Nationwide Protests Erupt in Iran Amid Severe Currency Devaluation

A substantial wave of nationwide protests and commercial strikes began in Iran on December 28, 2025, fundamentally driven by a severe economic contraction and the sharp devaluation of the Iranian Rial. The immediate trigger was the currency's collapse, with the exchange rate nearing 1.4 million Iranian Rials per U.S. dollar by the end of December, marking a depreciation of over two-thirds since 2022 and approximately 40% since the 12-day conflict with Israel in June 2025. This economic distress quickly evolved into widespread political dissent, as demonstrators in cities including Tehran, Isfahan, Shiraz, and Mashhad voiced explicit anti-regime slogans, including direct challenges to Supreme Leader Ali Khamenei.

The movement was initially catalyzed by merchants closing their shops within Tehran's Grand Bazaar, a historical indicator of systemic crises that signals a breakdown in commercial trust and price stability. The economic data underpinning the unrest was stark: the Statistical Center of Iran reported annual inflation exceeding 42% in December 2025, with point-to-point inflation reaching 52.6% by the month's close. Food inflation proved particularly acute, surpassing 72% year-on-year for food, beverages, and tobacco products by December. This hyperinflationary environment, exacerbated by the Central Bank's currency redenomination plan implemented in October 2025, significantly eroded the purchasing power of the general public, students, and laborers who subsequently joined the demonstrations.

The government, led by President Masoud Pezeshkian, acknowledged the mounting pressure, with Government Spokesperson Fatemeh Mohajerani attributing the protests to "natural pressure arising from the pressure on people's livelihoods." Security forces responded to the demonstrations with escalating measures, deploying water cannons and tear gas in locations such as Tehran and Fars Province. In Kuhdasht, Lorestan Province, violence reportedly resulted in the death of 21-year-old Basij militia member Amirhossam Khodayari Fard while "defending public order," alongside injuries to security personnel and two reported protestor fatalities in the southwest. The Prosecutor General issued a warning that protests escalating into "riots" would face a "decisive response."

The broader context includes significant geopolitical strain stemming from the aftermath of the June 2025 conflict and the September 2025 reinstatement of United Nations sanctions, which impacted oil revenues. Opposition figures framed the crisis as existential; Nobel Laureate Shirin Ebadi suggested the Islamic Republic was in its "final days." This period of unrest is viewed as the most significant internal challenge to the Islamic Republic since the 2022 "Woman, Life, Freedom" movement, occurring alongside an increase in state executions, with human rights agencies reporting figures between 1,500 and 1,922 executions throughout 2025. The current economic flashpoint, characterized by its cross-class nature involving bazaaris, students, and laborers, tests the regime's capacity to manage sustained internal and external pressures as it faces continued fiscal austerity measures outlined in the Parliament's forthcoming budget.