Iranian Rial hits historic low amid nationwide protests

The Iranian rial has experienced a sharp decline against the US dollar, exacerbating economic pressures amid widespread protests that have gripped the nation since late December 2025.

As of January 12, 2026, the unofficial exchange rate in Tehran's open market stood at approximately 1.47 million rials per dollar, marking a historic low and reflecting a nearly 45% depreciation over the past year.

This devaluation has fueled inflation rates hovering around 42%, severely impacting the cost of essential goods and eroding purchasing power for ordinary Iranians.

The currency's plunge began accelerating in mid-December 2025, when the rial breached the 1.4 million mark per dollar, prompting immediate unrest among merchants and citizens.

Analysts attribute this drop to a combination of factors, including stringent international sanctions, mismanagement of foreign reserves, and the government's decision to eliminate subsidized exchange rates for basic imports, which further strained the economy.

By early January 2026, the rial had weakened to 1.45 million per dollar before stabilizing slightly.

Protests erupted on December 29, 2025, initially in Tehran's Grand Bazaar, where shopkeepers shuttered businesses in response to soaring prices and the currency crisis.

The demonstrations quickly spread to over 180 cities, evolving from economic grievances into broader calls for leadership change, with participants chanting against corruption and authoritarian rule.

The Iranian government, under President Masoud Pezeshkian, has accused the United States and ‘Israel’ of instigating the turmoil, while simultaneously expressing readiness for dialogue or confrontation.

In response, US President Donald Trump has warned of potential military intervention, describing the crackdown as unacceptable and urging Tehran to negotiate.

The International Monetary Fund projecting persistent high inflation into 2026 and limited growth prospects under sustained sanctions.