Iran appoints new Central Bank governor amid currency crisis, protests

On December 31, Iran appointed a new central bank governor as an economic crisis sparked mass protests following a record fall of the rial against the U.S. dollar.

President Masoud Pezeshkian’s Cabinet appointed Abdolnaser Hemmati, a former economics minister, as the new governor of the Central Bank of the Islamic Republic of Iran, the official IRNA news agency reported.

Hemmati succeeds Mohammad Reza Farzin, who resigned on December 29, the day after the start of some of the largest protests in the country in three years, triggered by the decline of the rial to a record low.

Experts say a 40% inflation rate led to public discontent. The U.S. dollar traded at 1.38 million rials on December 31, compared with 430,000 rials when Farzin took office in 2022.

Many traders and shopkeepers closed their businesses on December 28 and took to the streets of Tehran and other cities to protest.

Hemmati's agenda will include a focus on controlling inflation and strengthening the currency, as well as addressing the mismanagement of banks, the government's spokeswoman Fatemeh Mohajerani wrote in a post on X.

Hemmati, 68, previously served as minister of economic and financial affairs under Pezeshkian. In March, parliament dismissed Hemmati for alleged mismanagement and accusations his policies hurt the strength of Iran’s rial against hard currencies.

A combination of the rial's rapid depreciation and inflationary pressure has pushed up the prices of food and other daily necessities, adding to strain on household budgets already under pressure due to Western sanctions on Iran over its nuclear programme.

Inflation is expected to worsen with a petrol price change introduced in recent weeks.

"Any effort to turn protests over economic issues to insecurity, damage to public properties or carrying out foreign scenarios, will face...strong reaction," Prosecutor General Mohammad Movahedi Azad was cited by the Mizanonline news outlet as saying.

Iran's currency was trading at 32,000 rials to the dollar at the time of the 2015 nuclear accord that lifted international sanctions in exchange for tight controls on Iran’s nuclear programme. That deal unravelled after President Donald Trump unilaterally withdrew the United States from it in 2018, during his first term.

A vendor waits for customers at a traditional street market in the port city of Bandar Anzali, 25 

On December 31, Hamed Ostevar, a local judiciary official in the south of Iran, denied a young man had been killed during a protest, Mizanonline reported.

Ostevar, who is head of justice department of southern Iranian city of Fasa, said protests had turned violent after crowds broke into the governor's office and injured three policemen. Four protesters were arrested he said.

Merchants and traders have kept their shops closed in the main bazaars of Tehran, as well as in the southern city of Shiraz and western city of Kermanshah, witnesses said.

By Aghakazim Guliyev