Iran appointed a new governor for its central bank on Wednesday after a record currency fall and widespread outrage prompted his predecessor to resign. The Rial had plunged to 1.39 million against the dollar on Monday — prompting multi-day protests in most major cities. Hundreds of traders and shopkeepers shut their shops to lead rallies while others refused to continue transactions.
According to the official IRNA news agency, former economics minister Abdolnasser Hemmati has been appointed as the new governor of the Central Bank of the Islamic Republic of Iran. Mohammad Reza Farzin had resigned from the post on Monday amid growing calls for a solution.
The Iranian economy is currently at risk of recession — with the World Bank forecasting GDP will shrink by 1.7% in 2025 and 2.8% in 2026. Inflation hit a 40-month high of 48.6% in October while the rial fell to a new record low of 1,390,000 against the dollar on Monday.
Growing financial woes
The rial was trading at around 430,000 to the dollar when Farzin took office in 2022. Several factors have contributed to the current situation — including the unravelling of a nuclear accord under President Donald Trump. The rapid depreciation has also compounded inflationary pressure and pushed prices of food and other daily necessities higher. The growing strain on household budgets can soon worsen due to a gasoline price change introduced in recent days.
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 US President Donald Trump unilaterally withdrew the United States from it in 2018. There is also uncertainty over the risk of renewed conflict following June’s 12-day war involving Iran and Israel. Many Iranians also fear the possibility of a broader confrontation that could draw in the United States, adding to market anxiety.
In September, the United Nations reimposed nuclear-related sanctions on Iran through what diplomats described as the “snapback” mechanism. Those measures once again froze Iranian assets abroad, halted arms transactions with Tehran and imposed penalties tied to Iran’s ballistic missile programme.
Who is Abdolnasser Hemmati?
The prominent Iranian economist and politician was reappointed as governor of the Central Bank of Iran on Wednesday amid widespread economic turmoil. The 68-year-old had previously served as minister of economic and financial affairs under Pezeshkian.The Iranian parliament dismissed Hemmati for alleged mismanagement in March. Accusations were also levelled that his policies had hurt the strength of rial against hard currencies.
He had previously held the role from 2018 to 2021 before running for the presidential elections as a reformist candidate. He finished third and was later disqualified from the 2024 Iranian presidential election by the Guardian Council. The body responsible for vetting candidates did not disclose any official reasons for their decision. Experts suggest the move may have been linked to Supreme Leader Ali Khamenei’s preference for loyal conservative candidates.
Hemmati faces an uphill battle — with government spokesperson Fatemeh Mohajerani noting via X that his agenda will focus on controlling inflation, strengthening the currency and addressing the mismanagement of banks.
