Protests over Iran’s soaring cost of living spread to several universities on Tuesday, with students joining shopkeepers and bazaar merchants, semi-official media reported, as the government offered dialogue with demonstrators.

Iran’s rial currency has lost nearly half its value against the dollar in 2025, with inflation reaching 42.5% in December in a country where unrest has repeatedly flared in recent years and which is facing US sanctions and threats of Israeli strikes.

President Masoud Pezeshkian said in a social media post late on Monday that he had asked the interior minister to listen to “legitimate demands” of protesters.

Government spokesperson Fatemeh Mohajerani said a dialogue mechanism would be set up and include talks with protest leaders.

“We officially recognise the protests […] We hear their voices and we know that this originates from natural pressure arising from the pressure on people’s livelihoods,” she said on Tuesday in comments carried by state media.

Protesters March streets in Tehran

Video of protests, verified by Reuters as taking place in Tehran, showed scores of people marching along a street chanting “Rest in peace Reza Shah”, a reference to the founder of the royal dynasty ousted in the 1979 Islamic revolution.

Footage aired on Iranian state television on Monday showed people gathered in central Tehran chanting slogans.

The semi-official Fars News Agency reported that hundreds of students held protests on Tuesday at four universities in Tehran.

On social media, some Iranians voiced support for the protests with one, Soroosh Dadkhah, saying high prices and corruption had led people “to the point of explosion” and another, Masoud Ghasemi, warning of protests spreading across the country.

Iranian authorities have quashed previous bouts of unrest that have flared over issues ranging from the economy to drought, women’s rights and political freedoms, with violent security actions and widespread arrests.

The government has not said what form dialogue will take with the leaders of this week’s demonstrations, the first major protests since Israeli and US strikes on Iran in June, which prompted widespread expressions of patriotic solidarity.

Pezeshkian said in a meeting with trade unions and market activists on Tuesday that the government will do its best to resolve their issues and address their worries, according to state media.

Sanctions hammer economy

Iran’s economy has been in deep trouble for years after US sanctions were reimposed in 2018 when US President Donald Trump ended an international deal over the country’s nuclear programme during his first term in office.

United Nations sanctions on the country were reimposed in September and Reuters reported in October that several high-level meetings had been held on how to avert economic collapse, circumvent sanctions and manage public anger.

Economic disparities between ordinary Iranians and the clerical and security elite, along with economic mismanagement and state corruption — reported even by state media — have fanned discontent at a time when inflation is pushing many prices beyond the means of most people.

The currency slid to 1.4 million rials to the US dollar on Tuesday according to private exchange platforms, a record low after starting the year at 817,500 rials to the dollar.

Monthly annualised inflation figures have not dropped below 36.4% since the Iranian new year started in late March according to official figures.

On Monday the central bank chief resigned with Iranian media saying the government’s recent economic liberalisation policies had put pressure on the open-rate rial market, where ordinary Iranians buy foreign currency. Most businesses use official currency exchanges where the rial price is supported.

In 2022, Iran was buffeted by protests across the country over price hikes, including for bread, a major staple.

Over the same period and into 2023, the country’s clerical rulers faced the boldest unrest in years touched off by the death of a young Iranian Kurdish woman, Mahsa Amini, in the custody of the morality police, who enforce strict dress codes.

Iran remains under intense international pressure, with Trump saying on Monday that he might back another round of Israeli airstrikes if Tehran resumed work on ballistic missiles or any nuclear weapons programme.

The US and Israel carried out 12 days of airstrikes on Iran’s military and its nuclear installations in June aimed at stopping what they believe were efforts to develop the means to build an atomic weapon.

Iran says its nuclear energy programme is entirely peaceful and that it has not tried to build a nuclear bomb.

• Saudi-led coalition strikes southern Yemeni port of Mukalla.
  
• UAE-backed STC to undermine state: Yemen’s presidential council.
• KSA urges UAE to comply with Yemen’s demand to leave country.
  

Saudi Arabia said on Tuesday its national security was a red line and backed a call for UAE forces to leave Yemen within 24 hours, hours after a Saudi-led coalition carried out an airstrike on the southern Yemeni port of Mukalla.

The warning comes as the coalition struck what it described as foreign military support to UAE-backed southern separatists, and the head of Yemen’s Saudi-backed presidential council set the deadline for Emirati forces to leave.

Yemen’s presidential council head, Rashad al-Alimi, also cancelled a defence pact with the UAE, the Yemeni state news agency said, and complained of UAE’s support for the Southern Transitional Council (STC).

“Unfortunately, it has been definitively confirmed that the UAE pressured and directed the STC to undermine and rebel against the authority of the state through military escalation,” he added.

Saudi Arabia urged the Emiratis to comply with the demand. The UAE’s foreign ministry did not immediately respond to a request for comment.

Yemen offensive

The UAE was a member of the Saudi-led coalition battling the Iran-aligned Houthi movement in Yemen from 2015. In 2019 it started a drawdown of its troops in the country but remained committed to the Saudi-backed internationally recognised government.

The STC later decided to seek self-rule in the south and this month advanced in a sudden offensive against Saudi-supported Yemeni government troops.

The advance broke years of stalemate, with the STC claiming broad control of the south. Saudi Arabia had warned the STC against military moves in the eastern border province of Hadramout and sought the withdrawal of its forces.

The STC dismissed the Saudi call.

The limited airstrike followed the weekend arrival of two ships from the UAE port of Fujairah on Saturday and Sunday without its authorisation, the coalition said.

After arriving in Mukalla, the vessels disabled their tracking systems and unloaded large quantities of weapons and combat vehicles to support the STC, it added.

No casualties in strike

The coalition said the Mukalla port strike caused no casualties or collateral damage, according to Saudi state media.

Two sources told Reuters that the strike targeted the dock where the cargo of the two ships was unloaded.

Footage on Yemen’s state TV showed what it said was black smoke rising from the port in the early morning after the strike, with burned vehicles at the port.

UAE-backed forces control large swathes of land in the south including the strategically key province of Hadramout.

Yemeni presidential council head Alimi imposed a no-fly zone, and a sea and ground blockade on all ports and crossings for 72 hours, except for exemptions authorised by the coalition.

Hadramout borders Saudi Arabia and has cultural and historical ties with it. Many prominent Saudis trace their origins to the area.

Since 2022 the STC has been part of an alliance that controls southern areas outside Houthi control, under a Saudi-backed power-sharing initiative.

The Houthis control the northern region, including Sanaa, the capital.

“We will continue to prevent any military support from any country to any Yemeni faction without coordination with the legitimate government,” the coalition added.

• Tehran shopkeepers keep stores shut amid currency plunge.
• Protesters demand intervention on exchange-rate volatility.
• Central bank governor replaced as crisis deepens.

TEHRAN: Iran’s president urged his government to listen to the “legitimate demands” of protesters, state media reported on Tuesday, after several days of demonstrations by shopkeepers in Tehran over economic hardships.

Shopkeepers in the capital had shut their stores for the second day in a row on Monday, after Iran’s embattled currency hit new lows on the unofficial market.

The US dollar was trading at around 1.42 million rials on Sunday — compared to 820,000 rials a year ago — and the euro nearing 1.7 million rials, according to price monitoring websites.

“I have asked the interior minister to listen to the legitimate demands of the protesters by engaging in dialogue with their representatives so that the government can do everything in its power to resolve the problems and act responsibly,” President Masoud Pezeshkian said, according to the state-run IRNA news agency.

Protesters “are demanding immediate government intervention to rein in exchange-rate fluctuations and set out a clear economic strategy”, the pro-labour news agency ILNA reported Monday.

Price fluctuations are paralysing the sales of some imported goods, with both sellers and buyers preferring to postpone transactions until the outlook becomes clearer, AFP correspondents noted.

“Continuing to do business under these conditions has become impossible,” ILNA quoted protesters as saying.

The conservative-aligned Fars news agency released images showing a crowd of demonstrators occupying a major thoroughfare in central Tehran, known for its many shops.

Another photograph appeared to show tear gas being used to disperse protesters.

“Minor physical clashes were reported… between some protesters and the security forces,” Fars said, warning that such gatherings could lead to instability.

Battered economy

Iranian Chief Justice Gholamhossein Mohseni Ejei called for “the swift punishment of those responsible for currency fluctuations”, the justice ministry’s Mizan agency reported Monday.

The government has also announced the replacement of the central bank governor.

“By decision of the president, Abdolnasser Hemmati will be appointed governor of the Central Bank,” presidency communications official Mehdi Tabatabaei posted on X.

Hemmati is a former economy and finance minister who was dismissed by parliament in March because of the sharp depreciation of the rial.

Pezeshkian delivered on Sunday the budget for the next Persian year to parliament, vowing to fight inflation and the high cost of living.

In December, inflation stood at 52% year-on-year, according to official statistics. But this figure still falls far short of many price increases, especially for basic necessities.

The country’s economy, already battered by decades of Western sanctions, was further strained after the United Nations in late September reinstated international sanctions linked to the country’s nuclear programme that were lifted 10 years ago.

Western powers and Israel accuse Iran of seeking to acquire nuclear weapons, a charge Tehran denies.