TEHRAN, Iran — A wave of economic desperation has turned deadly in Iran as protests over a record-breaking currency collapse spread from metropolitan bazaars into the country’s rural provinces. Authorities and human rights groups confirmed on January 1, 2026, that at least three people have been killed—the first reported fatalities in a week of unrest that has become the most significant challenge to the clerical establishment since 2022.
The violence erupted in the southwest and central regions of the country, marking a dangerous escalation as the “merchant strike” in Tehran evolves into a broader, more volatile movement fueled by hyperinflation and a sense of systemic failure.
A Free-Falling Rial: 1.4 Million and Rising
The catalyst for the unrest is the total evaporation of purchasing power. The Iranian rial hit a catastrophic low on the unofficial market this week, trading at approximately 1.45 million rials to the US dollar.5
- The Wage Gap: Just one year ago, the rate stood at 820,000. Today, the average monthly salary for many Iranians has effectively plummeted to a value of roughly $100 (€85), making basic food and medicine increasingly unattainable.
- The Pezeshkian Dilemma: President Masoud Pezeshkian, often labeled a “reformist,” has signaled a posture of dialogue but admits his hands are tied. In a candid statement, he noted that the government cannot effectively govern while the currency remains in a tailspin, blaming the crisis on deep-seated monetary imbalances and the fallout from a brief but devastating 12-day war with Israel in June 2025.
The “Bread and Butter” Revolt
Unlike previous movements led by urban youth, this “Rial Revolt” began with the Tehran Grand Bazaar—historically the conservative backbone of the Iranian economy.
- Market Shutdowns: What started as a strike by mobile-phone merchants on December 28 quickly spread to university campuses and then to rural areas.
- Rural Escalation: The fatalities occurred in Lordegan and Kouhdasht, regions predominantly home to the Lur ethnic group. Reports indicate security forces used lethal force to disperse crowds that had blocked major transport arteries.
- Security Casualties: The Islamic Revolutionary Guard Corps (IRGC) reported that a member of the Basij paramilitary unit was “martyred” during clashes in the western city of Kuhdasht, alongside 13 other injured officers.
| Economic Metric | December 2024 | January 2026 |
| Exchange Rate (USD/IRR) | ~820,000 | ~1,450,000 |
| Official Inflation Rate | ~38% | ~50.2% |
| Proposed Tax Hike | — | 62% (2026 Budget) |
The Path Ahead: Dialogue or Crackdown?
While the government has offered to hold talks with trade unions and merchants, the IRGC has simultaneously warned of a “decisive response” to what it terms “foreign-guided sedition.”
Observers note that the 2026 budget—which proposes a 62% increase in taxes despite 50% inflation—has acted as “the last nail in the coffin” for public trust.16 For many on the streets, the distinction between political “reformers” and “hardliners” has vanished, replaced by a singular demand for a fundamental shift in how the nation’s wealth and security are managed.
