Economic Crisis Sparks Political Shake-Up: Hemmati Dismissed on March 2 Amid Inflation and Currency Woes

On March 2, members of the Iranian Parliament voted to dismiss Abdolnaser Hemmati, the Minister of Economy and Finance, after reviewing his impeachment proposal. During an afternoon session chaired by Masoud Pezeshkian, the cabinet expressed regret over not having granted Hemmati a vote of confidence. Shortly thereafter, Rahmatollah Akrami was appointed to lead the Ministry of Economy and Finance—a role he assumed after serving as Deputy Minister of Economy, overseeing national financial supervision and treasury management.

Out of the 273 members present, 182 voted against Hemmati while only 89 supported his continuation in office. Officials cited factors such as currency fluctuations, devaluation of the national currency, an inflation crisis, and rising prices of essential goods as the primary reasons for the impeachment.

Pezeshkian, who attended the session to defend his minister, declared that the country is “at war” and noted that even Qatar, Turkey, and Iraq are withholding the return of Iran’s dollars. He explained that following the arrival of Donald Trump and the enactment of specific legislation, many of Iran’s ships were sanctioned at sea—hindering their ability to offload oil and gas. He further pointed out that although Iran holds significant dollar reserves, they are not being returned, citing the Supreme Leader’s claim that Qatar holds six billion dollars on Iran’s behalf. Similar conditions exist in Iraq and Turkey.

Pezeshian emphasized that since his government took office, the country has faced a series of challenges—from the assassination of Ismail Haniyeh amid his inauguration to crises in Gaza and Lebanon, as well as issues stemming from Trump’s policies. He added that, in times of war, assigning blame will not resolve the underlying problems. He recalled that the Supreme Leader has repeatedly described the sanctions and economic pressures as an “economic war.”

During his address, Pezeshkian revealed that he initially supported negotiations with the United States but that he abandoned that position when the Supreme Leader announced his opposition. He also apologized on behalf of the government for power outages and energy issues, stating, “I apologize once again from this podium to our dear citizens. I never intended for us to burn diesel or cut off electricity to our people and factories.” He warned that without these measures, gas supplies might have been halted during the winter months. Pezeshkian further observed that managerial problems cannot be resolved in six months, noting that his ministers have yet to appoint the appropriate managers.

On Pezeshkian’s pivot on U.S. negotiations, foreign policy and political commentator Diako Hosseini outlined concerns that such a position could be harmful to Iran over the long term. He stated “Preparing to negotiate with the United States, with all the obstacles and uncertainties surrounding it, is not wise compared to last year, but it is wise compared to next year; unless Iran expects economic growth, international influence, and higher national currency value, as well as lower inflation, budget deficits, and instability, for next year.”

Opposing the impeachment, Mohammad Ghasem Osmani from Boukan argued, “Only this government is facing such exceptional conditions, and today we must support it rather than hinder it.” In contrast, Jabbar Kochakinajad, a member of the Budget and Planning Commission and a supporter of the impeachment, contended, “This impeachment, driven by the minister’s poor performance, will ultimately benefit the government.” Meanwhile, Ruhollah Izadkhah of Tehran remarked, “We have no personal issues with Hemmati, but we stand against an economy that is overly dependent. Is it too late to prevent an economic collapse?”

Some parliamentarians also referenced text messages sent by Saeed Jalili’s faction – dubbed the shadow government faction to underscore their commitment to undermining the administration – urging members to vote in favor of impeachment. Osmani claimed that Hemmati had “removed a thousand instances of rent-seeking from the profiteers’ clutches” and noted that messages circulated among members stating, “You are not a man if you do not vote for impeachment.” Gholamreza Tajgardoon, head of the Budget and Planning Commission, confirmed that similar messages were indeed sent. Supporters of 

Defending himself, Hemmati stated, “The increase in the exchange rate and the conversion rate of the Rial to the dollar (approximately 91 to 92 thousand Toman) does not reflect the real market price but is driven by inflationary expectations.” He added, “Underlying inflation is one of the country’s most significant issues; however, the inflation rate in Iran has decreased. In this month last year, inflation was 42%, and it has now dropped to 32%. Yes, 32% is still high, but it is an improvement compared to 42 or 55%.”

Hemmati further explained that factors such as events in Syria and Lebanon, the loss of major resistance leaders, the rise of Trump, and essentially the declaration of an outright economic war were additional contributors to the exchange rate fluctuations. Addressing the parliament, he stated, “I will not discuss matters that might please the enemy,” referring to what he described as the “terrible misalignment” in the banking sector. He noted, “Over the past seven years, 10 million people have fallen below the poverty line; we are well aware of this, and based on our capabilities, we are moving forward.” Furthermore, the Minister of Economy stressed that despite what has been characterized as an “economic war” waged by foreign countries against Iran, the country is effectively being run by the resilience of its people, and he attributed the current growth in liquidity to longstanding issues rooted in the past.

IRNA, the official news agency of the Islamic Republic of Iran, in reaction to the pressure exerted on the government, described Mr. Hemmati’s impeachment as a “harm to unity” in one of its headlines. It stated that “It is the duty of the parliament to supervise the performance of the government, but turning it into a partisan and subjective dispute is not only not beneficial for our country, but also fundamentally damaging.”