The parliament has ousted Hemmati in a no confidence vote almost eight months after President Masoud Pezeshkian appointed his cabinet.
Over the eight-month period, Iran's currency has lost close to half of its value against the US dollar, according to unofficial websites, such as alanchand.com.
The Iranian rial now trades at 927,000 to the US dollar, against 595,500 in August of last year.
MPs opposing Hemmati argued that he had failed to prevent price increases in basic goods such as medicine, food and housing while being unable to control the foreign exchange market, state media said.
Hemmati had prioritised ending US sanctions on Iran and removing the country from the Financial Action Task Force's blacklist, state media said.
This was opposed by MPs who believe Iran should focus on "neutralising" sanctions.
Hemmati's supporters said it was not the right time to remove the economy minister as Iran remained under US sanctions and replacing him would cause further instability, according to state media.
The economy is the top challenge for Iran's ruling clerics, who fear a revival of protests by lower and middle-income communities angry at growing poverty that have erupted since 2017.
US President Donald Trump has reinstated his "maximum pressure" campaign aiming to cut Iran's oil exports to zero.
In the vote, 182 MPs backed the no confidence motion on Hemmati while 89 voted against the measure, according to state media.
