Nationwide protests show a nation fed up with Tehran's currency failures

Global Watch | 2026-02-02

Iran is facing a perfect storm of crises that have pushed its people to the breaking point. The collapse of the Iranian rial, high inflation and shrinking incomes have hollowed out everyday life, turning routine purchases into calculations of survival.

These economic failures, compounded by years of corruption and mismanagement, have now converged with political anger, sparking protests that have spread across the country.

By mid-January 2026, after weeks of unrest and the reported killing of around 3,500 protesters, the trigger for the protests has become impossible to ignore: the Iranian rial's historic collapse.

Trading at nearly 1.65 million per US dollar on the open market in mid January, the currency's depreciation has pushed the prices of basic goods beyond reach for large sections of the population.

What began as economic distress has now erupted into a visible rejection of the regime's failures.

Collapse of the rial

The Iranian rial's collapse is a symbol of a system in free fall.

Since 2020, the rial has lost nearly 800% of its value, rendering it effectively unusable outside Iran and deeply unstable at home.

While currencies do not formally fall to zero as long as a state continues to function, the rial's extreme loss of purchasing power has made survival a daily struggle for millions of Iranians.

The currency's downward spiral accelerated in 2025, losing nearly 45% of its value over the year. By December, the rial was trading at 1.42 million per US dollar, triggering protests and the resignation of the Central Bank governor.

The situation worsened after the brief 12-day war with Israel in June 2025, which further undermined confidence in economic recovery.

Inflation has reached crisis levels, rising above 42% year-on-year by December 2025. As prices surged, households and businesses rushed to convert rials into dollars, gold or physical goods, accelerating the currency's decline.

Gold prices, a traditional hedge against inflation in Iran, have more than doubled since the war, with coins now costing 1.7 billion rials.

Corruption and mismanagement

The collapse of the rial is the result of the culmination of years of corruption, mismanagement and geopolitical isolation.

International sanctions have sharply limited Iran's access to foreign currency, particularly oil revenues, leaving the Central Bank unable to defend the rial or stabilize markets.

Economic growth has stalled, with Iran's GDP projected to contract by 1.7% in 2025. This has reduced tax revenues and worsened fiscal stress, weakening the state's ability to manage subsidies or intervene effectively in currency markets.

Policy changes starting in late 2025, such as requiring importers to buy foreign currency at open-market rates instead of subsidized ones, intensified pressure on the rial overnight.

The regime's focus on military ambitions, including its nuclear program, has further drained resources. The aftermath of the war with Israel reinforced what many Iranians describe as a condition of "no war, no peace," undermining confidence in recovery and deepening the economic crisis.

Rejection of the regime

The protests sweeping across Iran are not a parallel story to the currency crisis -- they are its direct consequence. What began as strikes by traders and shopkeepers angered by collapsing margins and price volatility has now spread nationwide, with hundreds of protests reported across all provinces.

Rising food prices, including staples such as dairy, have become flashpoints, while wages for many workers remain nearly $100 a month. Electronic goods sellers have shut stores in central Tehran, and strikes in the Grand Bazaar have paralyzed commerce. The protests are no longer just about economic distress; they are a rejection of the regime’s failures and a demand for change.

The government's response has been brutal. Thousands of protesters have been killed or detained, and crackdowns have intensified. But the unrest shows no signs of abating, as the Iranian people refuse to accept a system that has failed them economically, politically and socially.

The Iranian people are fed up, tired and unwilling to continue putting up with their government's failures. The protests are a visible rejection of a regime that has prioritized its own survival over the well-being of its citizens.

As the currency crisis deepens and unrest spreads, the cracks in Iran's system are becoming impossible to ignore.