Iran International
Iran’s bazaar strike, sparked by currency chaos and collapsing purchasing power, is widening beyond traders and shopkeepers – pulling in students and salaried workers as the anger is spreading across Iran’s squeezed middle and low-income households.
President Masoud Pezeshkian’s administration says it recognizes the public’s right to protest, but it has neither the financial resources to placate the deepening public anger nor the political leverage to confront hardliners who place the blame squarely on the government.
Pezeshkian addressed the situation on social media on Tuesday, writing that people’s livelihoods are his daily concern and that fundamental reforms of the monetary and banking system are on the agenda to protect purchasing power. He also said he had tasked the interior minister with speaking to representatives of the protesters.
The message failed to convince most Iranians, including many of Pezeshkian’s own supporters.
Morteza Nemati Zargaran, a university professor, reminded Pezeshkian in a post on X that recognizing public protests carries no practical guarantees as long as he lacks the necessary authority.
“What action can you take if the protesters’ representatives challenge the country’s overarching policies – policies to which you have repeatedly declared your loyalty? And what will you do if … they are arrested by power centers beyond your government?”
'Closed is cheaper than open'
The economic strain has been especially visible in Tehran’s Grand Bazaar.
Morteza, a 45-year-old former wholesale shoe merchant who recently closed his shop after failing to pay rent, told Iran International that nearly all his fellow traders have joined the ongoing bazaar strike.
“They tell me I’m lucky I shut my shop and left,” he said. “They say they lose less money if they keep their shops closed now than if sell their goods – because it’s impossible to replace the stock at the same price.”
The stagnation has become so severe that some shops have recently advertised installment plans for clothing and shoes – an unprecedented practice in Iran and a sign of sharply declining purchasing power.
Morteza added: “The economic situation is so dire that the government no longer dares to deny it. When someone earning 400 million rials a month (around $280) – still a dream salary for many – is below the poverty line in Tehran, it means almost no worker or employee can endure the pressure anymore. Everyone has reached their limit, in every sense.”
Cautious nod from state media
Concerns over further escalation appear to be growing within official circles.
On Monday, state television – controlled by hardliners opposed to President Masoud Pezeshkian – briefly covered the bazaar protests for the first time.
Cameras were taken into shops, airing interviews in which merchants emphasized that their protests were economic in nature and driven by currency volatility rather than politics.
At the same time, videos circulating on social media showed protesters chanting anti-government slogans in several locations.
According to Morteza, while the protests so far have had a strong economic dimension, they cannot be reduced to bread-and-butter issues alone.
“Livelihood is not the only reason for people’s anger. This time, the government cannot calm society with small handouts, superficial concessions or a crackdown.”
Fear at the bottom, strain in the middle
Iran’s deteriorating economy has devastated low-income households while also eroding the lives of salaried middle-class families who once enjoyed relative stability.
Even by official figures, inflation surpassed 50 percent last month. Yet the government’s proposed budget for next year includes only a 20 percent increase in salaries for civil servants and retirees, deepening concerns over an unbridgeable gap between incomes and living costs.
Middle-class families may still live in reasonably maintained homes, but a burst pipe, a broken car, or a medical emergency can wipe out most of a month’s income, according to widespread accounts on social media.
Downsizing, once a coping strategy, now offers little relief. Iran’s housing market – particularly in Tehran – is experiencing an unprecedented slump, limiting families’ ability to sell or relocate to offset rising costs of food and utilities.
Journalist Mohammad Parsi wrote on X: “In this country… first buying a home became a dream, then a car, a phone, travel – and now even essential goods are disappearing from daily life, just like that, in one of the richest countries in the world.”
Another user, Arian Bahmani, described even buying basic snacks as a financial calculation, calling it “a frightening collapse of living standards.”
“The disaster is not that we can’t buy a house or a car – they’ve been dreams for years,” he wrote. “The disaster is that ‘500,000-rial (about 35 cents) treats are luxury purchases. When buying snacks becomes a financial risk, we are no longer citizens – we are hostages.”
Historically, in Iran, religious institutions and conservative merchants—the Bazaaris—were inseparable allies. It was the Bazaaris who bankrolled the anti-state revolution of 1979, famously chartering the plane that carried Ayatollah Khomeini back to Tehran.
Yet, 46 years later, the Islamic Republic has managed to alienate its oldest and most critical constituency. For the Iranian merchant today, that alliance is dead, and commerce has become a losing game.
Despite having no hand in inflation, merchants are often blamed as price gougers. If they reject state-mandated pricing, they are accused of hoarding and tampering with the market; if they comply, they may not be able to afford to restock their inventory, selling their way into bankruptcy.
Simultaneously, the centralized allocation of foreign currency for imports drags on for months, while exporters are forced to sell their hard-earned foreign currency at losses due to state pressure.
The atmosphere grew more volatile last week with the announcement of a new gasoline pricing policy, which exacerbated existing anxieties about the economy.
The release of the next year’s budget was the last straw. With oil revenues projected to cover a mere 5% of administrative costs, the government wants the public to foot the bill through deficit spending and significant tax increases.
The trade-off is stark: while every subsidy has been stripped from the ledger, the budget for security and defense has increased. By prioritizing the military and security over public welfare, the state has effectively transferred the entire burden onto the people’s dinner tables.
The market is rejecting this pressure. Merchants argue that they are being suffocated to fund the state's regional ambitions. Facing chronic 60% inflation and the weight of sanctions, business owners can no longer survive, let alone profit.
The message from the bazaar is clear: the economy cannot sustain the vows to rebuild the missile arsenal.
The state’s response to the protests has been predictable: a photo-op meeting with a handpicked group of supportive businessmen and the scapegoating of the Central Bank Governor.
The dismissal of Mohammad-Reza Farzin had been on the table for months, held in reserve as a sacrificial offering. Now, with protests spreading throughout the country, the administration offers his firing as a promise of change.
But the Iranian people see through this theater. They know the Central Bank Governor is not an independent policymaker, but a mere functionary. Replacing him with Abdolnaser Hemmati—a recycled official previously fired from the same post over rial's devaluation—signals continuity, not reform.
Public slogans reveal that the bazaar and the street are now speaking with one voice. The grievances have moved beyond daily economics; they challenge the specific governing priorities that drive this decline. The public understands that their economic distress is not an accident of mismanagement, but the calculated cost of the state's strategic choices.
This leaves the Islamic Republic with a binary choice: abandon regional ambitions and missile proliferation to return to the negotiating table, or double down on repression.
As evidenced by the direct fire opened on protesters yesterday, the regime has chosen the path of force. The market’s message is unmistakable: the people want fundamental change. The government’s answer is not reform, but bullets.
