Riot police clashed with demonstrators and foreign exchange dealers in Tehran on Wednesday over the collapse of the iran
ian currency, which has lost 40 percent of its value against the dollar in a week, witnesses said.
Police fired tear gas to
disperse the demonstrators, angered by the plunge in the value of the
rial. Protesters shouted slogans against President Mahmoud Ahmadinejad,
saying his economic policies had
rial has hit record lows against the U.S. dollar almost daily as
Western economic sanctions imposed over Iran's disputed nuclear
programme have slashed Iran's export earnings from oil, undermining the
central bank's ability to support the currency.
Panicking Iranians have scrambled to buy hard CURRENCIES,
pushing down the rial. With Iran's official inflation rate at around 25
percent, the currency's weakness is hurting living standards and
The government blames speculators for the rial's collapse and ordered the security services to take action against them.
"Everyone wants to buy dollars and it's clear there's a bit of a bank run," said a Western diplomat based in Tehran.
announcement of using police against exchangers and speculators didn't
help at all. Now people are even more worried."
watchers of Iran say the protests pose a threat to Ahmadinejad rather
than the government, but his term will end in June when a presidential
election is due and he cannot run for a third time in any case.
expect the government to stop the foreign exchange dealings and pump in
money to stabilise the currency and prevent the protests from
Tehran's main bazaar,
whose merchants played a major role in Iran's revolution in 1979, was
closed on Wednesday, witnesses said. A shopkeeper who sells household
goods there told Reuters that the instability of the rial was preventing
merchants from quoting accurate prices.
protests centred around the bazaar and spread, according to the
opposition website Kaleme, to Imam Khomeini Square and Ferdowsi Avenue
-- scene of bloody protests against Ahmadinejad's re-election in 2009.
shouted slogans like "Mahmoud the traitor - you've ruined the country"
and "Don't fear, don't fear - we are all together," the website said.
Iranian authorities currently do not allow Reuters to report from inside the country.
national currency dived to a record low on Tuesday to 37,500 to the
U.S. dollar in the free market, from about 34,200 at the close of
business on Monday, foreign exchange traders in Tehran said. On Monday
last week, it traded at around 24,600.
on Tuesday blamed the crisis on the U.S.-led economic sanctions on Iran
and insisted the country could ride out the crisis. He urged Iranians
not to change their money for dollars and said security forces should
act against 22 "ringleaders" in the currency market.
"VERGE OF COLLAPSE"
rial's slide suggested the Western sanctions were having a serious
impact. On Sunday, Israeli Finance Minister Yuval Steinitz said Iran's
economy was "on the verge of collapse".
businessmen and ordinary citizens say the government is at least partly
to blame for the currency crisis, and Ahmadinejad has been criticised
by enemies in parliament.
has lost about two-thirds of its value since June 2011. Its losses
accelerated in the past week after the government launched an "exchange
centre" to supply dollars to importers of basic goods; businessmen say
the centre failed to meet demand for dollars.
news agency ICANA quoted Mohammad Bayatian, a member of parliament's
industry and mines committee, as saying enough signatures had been
collected to call Ahmadinejad to parliament for questioning over the
protested in front of parliament on Monday over a lack of
government-subsidised dollars for their studies abroad, the Iranian
Labour News Agency reported.
The impact of sanctions on Iran can be seen across the Gulf in Dubai, a major centre of trade with Iran.
the Dubai Creek, a crowded waterway from which motorised dhows ship
goods to Iran, merchants said Iranian business had fallen off
dramatically in the last two weeks.
is losing; traders from Iran are losing because of the depreciating
rial, and we're losing here because Iranians can't afford to buy our
products anymore," said Ahmed Mohammed Amin, 53, an Iranian trader who
has lived in Dubai for 40 years.
providing rates for the rial stopped updating on Tuesday, and Dubai
money changers said they were not selling the rial because they had lost
contact with their Tehran counterparts.