THE head of Iran’s Central Bank quit today as protests erupted for a second day in Tehran and several other cities after the country’s currency plummeted to a new record low against the US dollar.

Mohammad Reza Farzin’s resignation was reported by state television as hundreds of traders and shopkeepers rallied in Saadi Street in central Tehran and in the Shush neighbourhood near the capital’s Grand Bazaar.

Merchants from the market played a crucial role in the 1979 revolution that ousted the monarchy.

The official IRNA news agency confirmed protest gatherings, while witnesses reported similar rallies in other major cities, including Isfahan in central Iran, Shiraz in the south and Mashhad in the north-east.

In some districts of Tehran, police fired tear gas to disperse protesters.

On Sunday, demonstrations were largely confined to two major mobile markets in central Tehran, where protesters chanted anti-government slogans.

The same day, Iran’s currency, the rial, dropped to a record 1.42 million to the dollar before recovering slightly to around 1.38m today.

The sharp depreciation has intensified inflationary pressures, pushing up the cost of food and other essentials.

Economists warn that the situation could worsen following recent changes to petrol prices.

Official figures underline the crisis, with the state statistics centre saying that inflation had reached 42.2 per cent in December, up by 1.8 per cent.

Food prices have risen by 72 per cent annually, while health and medical costs increased by 50 per cent, fuelling fears of hyperinflation.

Concerns have also been heightened by reports that the government plans to raise taxes from March 21.

The rial traded at about 32,000 to the dollar when the 2015 nuclear deal was signed, before sanctions were reimposed after the United States withdrew in 2018.

Uncertainty over regional conflict and the reimposition of United Nations sanctions have added to market anxiety.