Iran International
Mounting pressure on President Masoud Pezeshkian’s administration from hardline opponents and an ailing economy appears to be cutting deep into his inner circle, triggering resignations, public spats and mistrust.
Recent departures and high-profile clashes demonstrate that misgivings within the 18-month-old administration have spilled into public view.
Fayyaz Zahed, a senior adviser, publicly quit last week.
In a sharply worded letter, Zahed denounced several recent appointments as “embarrassing” and reflective of “bad taste,” singling out the choice of Sagheb Esfahani—a hardliner with no experience in the energy sector—to head Iran’s energy optimization body.
Zahed’s colleague Mohammad Mohajeri later quoted him as telling Pezeshkian: “If you want a silent apologist as your adviser, please be advised that genuine opinion cannot be bought with orders and directives.”
Jafar the kingmaker
Much of the internal disarray is now being linked to the expanding influence of Vice President Mohammad Jafar Ghaempanah—an old friend, wartime companion and arguably the president’s closest confidant.
Reports from Khabar Online and outlets aligned with Majles Speaker Mohammad Bagher Ghalibaf accuse Ghaempanah of driving a series of controversial appointments and sidelining more experienced advisers.
Hardline media have seized on the moment, describing the resignations—grudgingly accepted by Pezeshkian—as evidence of a broader administrative failure, one that neither the president nor his deputies can reverse.
These departures land at a time when Iran’s economy is dragging under renewed sanctions, high inflation, frustrated expectations from the post-election period and a sense that Pezeshkian has struggled to articulate a coherent economic direction.
Hardline outlets including Javan, Kayhan and Sobh-e No have amplified that narrative, arguing that the president’s inability to rein in his inner circle has compounded the economic drift.
The line of attack is clear: factional meddling and poor personnel decisions are not just political missteps—they are undermining governance at a moment of national fragility.
VP Aref next?
Against this backdrop, pro-Ghalibaf media such as Sobh-e No and Khorassan now claim that First Vice President Mohammad Reza Aref has submitted his resignation.
The government has not confirmed the reports. Some accounts suggest the trigger is Aref’s escalating clashes with Ghaempanah and Chief of Staff Mohen Hajimirzai. Others say Aref grew frustrated with the “limited scope” of his role.
Aref himself has been criticized by both conservatives and moderates for taking on more responsibilities than his capacity allowed.
If Pezeshkian accepts Aref’s resignation, Ghaempanah would become the president’s last remaining senior vice president, consolidating his position as the most influential figure in the administration’s inner ring.
One anecdote from a recent provincial visit has circulated widely: after one too many sycophantic compliments from Ghaempanah, Pezeshkian reportedly snapped, “Come off it!”
Sasan Karimi, an aide to former foreign minister Javad Zarif, later quipped on social media: “The country would have been better off if Jafar (Ghaempanah) really did come off it. Sometimes the biggest obstacles lie within the innermost circles.”
Together, the confirmed exit of Zahed, the deepening feud around Ghaempanah, the economic malaise, and the swirl of unverified but persistent reports surrounding Aref paint a picture of an administration under severe strain and struggling to hold itself up.
Under the order, the Central Bank of Iran must prepare the shift within two years before managing a three-year phase in which old and new banknotes circulate together.
Once that cycle ends, all transactions will be settled in the new unit and existing notes will be withdrawn, according to Iranian state media.
Parliament earlier approved a law defining the “new rial” as equal to 10,000 current rials, with “gheran” designated as the subunit.
Economists remain divided over the effect of the redenomination. The policy is expected to require printing new notes, destroying old ones and modifying banking and accounting systems.
Critics argue that without wider reforms the move is mainly cosmetic, citing Argentina, Zimbabwe, Romania and the former Yugoslavia, where redenominations did little to restrain prices.
“This policy is largely cosmetic,” economist Ahmad Alavi told Iran International in August. “Without tackling the roots of inflation – from liquidity growth to systemic inefficiencies – removing zeros will not restore the rial’s value.”
Debate over deleting zeros began in the late 1990s and circulated through multiple administrations. Parliament first passed the plan in 2020, but the Guardian Council sent it back for revisions. The current version – retaining the name “rial” and introducing “gheran” – won final approval in October and has now entered execution with Pezeshkian’s signature.
Long path to implementation
Officials say the overhaul aims to simplify calculations, improve the legibility of Iran’s currency and prepare the ground for broader fiscal measures.
The abundance of zeros in the national currency had caused accounting and operational difficulties, Shamseddin Hosseini, head of parliament’s Economic Committee, said last month, adding that similar redenominations had been undertaken by countries such as Turkey in 2003 and 2005.
The reform comes amid persistent inflation of about 40%, a more than 90% loss in the rial’s value since US sanctions were reimposed in 2018, and widespread economic hardship.
With the formal order issued, the central bank begins one of the Islamic Republic’s most extensive monetary reforms, whose outcome still hinges on the government’s broader effort to control inflation.