TEHRAN, Iran (AP) — The biggest protests broke out in Iran in three years on Monday after the country's currency fell to a record low against the dollar and the head of the Central Bank resigned.

State television reported the resignation of Mohammad Reza Farzin, as merchants demonstrated on Saadi Street in central Tehran, as well as in the Shush neighborhood near the Grand Bazaar, a major and huge market in the Iranian capital. The tenants of this market played a crucial role in the 1979 Islamic Revolution that overthrew the monarchy and brought Islamists to power.

The official IRNA news agency confirmed the protests. Witnesses reported similar demonstrations in other major cities, including Isfahan in central Iran, Shiraz in the south and Mashhad in the northeast. In some places in Tehran, police fired tear gas to disperse protesters.

Monday's protests were the largest since 2022, when the death in police custody of Mahsa Jina Amini, a 22-year-old woman, sparked nationwide demonstrations. She was arrested by the morality police for allegedly not wearing the hijab properly.

Witnesses told The Associated Press that merchants closed their stores on Monday and asked others to do the same. The semi-official ILNA news agency reported that many businesses stopped selling, although some kept their stores open.

On Sunday, protests were limited to two large street markets in central Tehran, where demonstrators chanted anti-government slogans.

The rial plummeted to 1.42 million to the dollar on Sunday. On Monday, it was trading at 1.38 million rials per dollar.

Reports about Farzin's possible resignation have been circulating for the past week. When he took office in 2022, the rial was trading at about 430,000 rials to the dollar.

The rapid depreciation is aggravating inflationary pressure, raising the prices of food and other basic supplies and further stressing household budgets, a trend that could worsen with a change in gasoline prices introduced in recent days.

According to the state statistics center, the inflation rate in December rose to 42.2% compared to the same period last year, and is 1.8% higher than in November. Food prices rose 72% and health and medical items increased 50% since December last year, according to the statistics center. Many critics see the rate as a sign of impending hyperinflation.

Reports in official media that the government plans to raise taxes in the Iranian new year that begins on March 21 have caused further concern.

The currency was trading at 32,000 rials to the dollar at the time of the 2015 nuclear deal that lifted international sanctions in exchange for strict controls on Iran's nuclear program. That agreement fell apart after President Donald Trump unilaterally withdrew the United States in 2018.

There is also uncertainty after the 12-day war in June against Israel. Many Iranians also fear the possibility of a broader confrontation that could involve the United States, adding to market anxiety.

In September, the UN reimposed sanctions related to Iran's nuclear program that again froze Iranian assets abroad, halted arms deals with Tehran and imposed sanctions related to Iran's ballistic missile program.

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This story was translated from English by an AP editor with the help of a generative artificial intelligence tool.