What initially started as a reaction to economic distress amid sanctions and the tanking of the Iranian rial has turned into mass demonstrations against the ruling regime, with calls for the overthrow of the government of the Islamic Republic.
In the span of about a week, the protests evolved into one of the longest and most persistent episodes of unrest Iran has seen in recent months, according to rights monitors.
At least 119 people have been arrested, while at least eight individuals have been killed and 33 others injured since demonstrations began, according to the Human Rights Activists News Agency, which says protests have spread to at least 32 cities across multiple provinces.
1. Currency Drop
The immediate trigger for the unrest was a sharp decline in the value of Iran’s foreign exchange market. In late December 2025, the U.S. dollar climbed on the open market from below 1 million rials to about 1.45 million rials, fueling inflation, unsettling markets, and deepening cost-of-living pressures for Iranians.
Rising rents, lack of basic goods, and fluctuating wages have increased frustration amid the daily difficulties of living under the Islamic regime’s authoritarian rule.
Merchants in Tehran’s historic bazaar, which is often seen as a sign of economic confidence, said they struggled to set prices from one morning to the next, as currency swings made sales risky.
In several cities, shops closed, and strikes spread along with street protests, attracting students, workers, and small business owners.
Security forces reacted with crowd suppression tactics, including the use of tear gas and, in some cases, shooting directly at protesters, based on eyewitness reports and videos shared online. As the protests grew, economic complaints slowly turned into political slogans.
2. Government Response
Even though the mood on the streets has changed, the government has so far framed the situation as an economic issue. Authorities have replaced some top financial officials and promised policy changes.
As part of these steps, President Masoud Pezeshkian named Abdolnaser Hemmati as head of the Central Bank. Hemmati is linked to earlier reform efforts, but was previously removed from his post after lawmakers accused him of causing problems with the exchange rate. His return has raised new political tensions and criticism from hardline members of parliament.
Several analysts say that only making some leadership changes cannot resolve Iran’s crisis. Political commentator Saeed Bashirtash said that expectations surrounding the replacement of economic officials are misplaced.
“The idea that changing the central bank governor can solve Iran’s economic problems is an illusion,” Bashirtash said in an interview with the Persian edition of The Epoch Times, arguing that the crisis runs deeper than any single policy shift.
“The Islamic Republic is fundamentally at odds with the modern world,“ he added. ”Its bankruptcy is rooted in its ideology and constitutional framework.”
According to Bashirtash, public sentiment in Iran has shifted toward the belief that reform from within the existing system is no longer possible.
“Even if President Pezeshkian wanted to pursue real reforms, the system itself would not permit them,” he said.
Bashirtash says that addressing Iran’s economic and political challenges would require a comprehensive transformation, including reengagement with the international community, combating systemic corruption, establishing an independent judiciary, separating religion from the state, and ensuring respect for citizens’ rights.
3. Turning Point
Some analysts link the economic crisis fueling the protests to recent regional and international developments. Arya Kangarloo, a political commentator, said Iran’s 12-day conflict with Israel in June marked a turning point in the Islamic Republic’s projection of power.
Kangarloo said the conflict exposed what he described as the collapse of the regime’s core strategic tools.
“For years, the Islamic Republic relied on two main pillars: its nuclear program and its network of proxy forces,” he told The Epoch Times.
According to Kangarloo, these proxy forces—including the Hezbollah and Hamas terrorist groups, the Assad regime in Syria, Houthi terrorists in Yemen, and Iraqi militias—were created to put pressure on Israel through coordinated attacks on several fronts. He said that by weakening these groups, Israel removed one of the Islamic regime’s main strategic tools.
Kangarloo added that Israel’s strikes inside Iran, together with direct U.S. strikes on three Iranian nuclear sites, marked a major change. He added that these actions broke the regime’s image as a regional power and left it in a weak strategic position.
Kangarloo also mentioned recent moves by European countries to activate the so-called “snapback” mechanism, which would bring back international limits on economic ties with Iran. He said all these pressures together have played a direct role in the sharp fall of Iran’s currency.
“When the rial loses almost 8 percent of its value in just one day, normal business cannot continue,” Kangarloo said. “The bazaar is the biggest center of trade in Iran. When merchants are no longer able to do business, they reach their limit.”
As the demonstrations continued throughout the week, the slogans clearly moved beyond economic demands. Videos shared online showed protesters shouting chants such as “death to the dictator” and “Seyyed Ali will be toppled this year,” directly challenging the foundations of the Islamic regime. Seyyed Ali refers to Iran’s Supreme Leader, Seyyed Ali Khamenei.
At the same time, many protesters have turned to Iran’s pre-revolutionary past. In cities across the country, crowds were heard chanting phrases such as “This is the final battle, Pahlavi will return” and “Reza Shah, may God bless your soul.”
The return of these slogans has once again focused attention on Iranian Crown Prince Reza Pahlavi, who has spent most of his life in exile but still carries strong symbolic meaning for many in the country.
