Iran’s Central Bank Chief Resigns as Record Currency Crash Sparks Protests
Tehran, Monday, 29 December 2025.
As the rial plummeted to a historic 1.38 million against the dollar, Iran’s central bank governor resigned Monday, leaving a nation grappling with 42% inflation and spreading unrest.
Economic Leadership in Crisis
The resignation of Mohammad Reza Farzin as the head of Iran’s Central Bank on Monday, December 29, 2025, signals a deepening fracture in the nation’s economic governance [1][2]. Confirmed by the president’s office, the departure comes as the administration of President Masoud Pezeshkian struggles to contain a currency crisis that has seen the rial shed significant value in a matter of days [6]. The timing is critical; just a day prior, on Sunday, President Pezeshkian addressed Parliament regarding the proposed 2026 budget, openly acknowledging the fiscal deadlock with the rhetorical question, “They say, increase salaries. Where will we get the money?” [1]. This leadership void at the Central Bank exacerbates the uncertainty facing a nation of 92 million people already straining under the weight of international isolation [1].
A Currency in Freefall
The immediate catalyst for this political shakeup is the precipitous drop in the rial’s value. By Sunday, December 28, the currency had plunged to trade at 1.38 million rials to the U.S. dollar, following a dip to 1.42 million the previous day [2]. Other market reports indicated even more severe devaluation, with the dollar crossing the threshold of 144,000 tomans (1.44 million rials) in the free market on Sunday [3][5]. To put this collapse into perspective, when Farzin assumed office in 2022, the exchange rate hovered around 430,000 rials to the dollar [2]. The long-term trajectory is even more stark; following the 2015 nuclear accord, the rate was approximately 32,000 rials to the dollar [2]. This represents a massive depreciation of approximately 4212.5 percent over the last decade, fundamentally eroding the nation’s wealth.
Hyperinflation and Diminishing Purchasing Power
For the average Iranian citizen, these macroeconomic figures translate into an immediate and severe cost-of-living crisis. The annual inflation rate climbed to 42.2 percent in December 2025, marking a 1.8 percent increase from the previous month [2]. The impact is most acute in essential sectors; food prices have surged by 72 percent compared to the previous year, while medical and health items have seen a 50 percent increase [2]. Media outlets have described the situation as a “fall to the age of survival,” as households are forced to cut back on basic necessities [5]. The economic strain is further compounded by government plans to increase taxes in the upcoming Iranian new year, scheduled to begin in March 2026 [2].
Geopolitical Pressures and Public Outcry
The economic unraveling is inextricably linked to renewed geopolitical tensions. Following a 12-day conflict with Israel in June 2025 and the subsequent reimposition of UN nuclear-related sanctions in September—which froze assets and halted arms transactions—Iran’s financial isolation has intensified [1][2]. The market’s volatility has spilled over into civil unrest, with protests erupting across major urban centers including Tehran, Isfahan, Shiraz, and Mashhad on Sunday, December 28 [2]. In the capital, security forces reportedly deployed tear gas to disperse crowds demonstrating against the plunging currency and soaring prices [2]. As the rial continues to fluctuate violently, the government faces the dual challenge of stabilizing a chaotic financial system while quelling growing public dissent [5][6].