Protesters clash with police over currency crash
RIOT police clashed with demonstrators and foreign exchange dealers in Tehran over the collapse of the Iranian currency, which has lost 40% 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, s ayi ng hi s economic policies had fuelled the financial crisis.
The rial has hit record lows against the 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%, the currency’s weakness is hurting living standards.
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. “Ahmadinejad’s announcement of using police against exchangers and speculators didn’t help at all. Now people are even more worried.”
Iran watchers 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.
They expect the government to stop the foreign exchange dealings and pump in money.
Tehran’s main bazaar, whose merchants played a major role in Iran’s revolution in 1979, was closed yesterday, witnesses said.
A shopkeeper who sells household goods there said the instability of the rial was preventing merchants from quoting accurate prices.
The protests centred around the bazaar and spread, opposition website Kaleme said,