Business, Economics and Jobs

Iran: Riot police clash with protesters over rial plunge


Iranian riot police stand next to a garbage container which is set on fire by protesters in central Tehran, near the main bazaar, on October 3, 2012, in the first sign of public unrest over Iran's plunging currency. The rial, lost more than half of its value since last week as the plunge has greatly increased inflation in Iran, which is widely seen as far higher than the official 23.5 percent given by the central bank.



Protesters in Tehran clashed with riot police on Wednesday as they demonstrated against the sharp plunge in Iran's currency, the rial.

Police also reportedly arrested or shut down money changers in Tehran, Reuters reported. Officers fired tear gas to disperse the protesters who denounced President Mahmoud Ahmadinejad as a "traitor," blaming him for the sharp fall in the currency.

The BBC reported that protesters set fire to tires and garbage bins. Witnesses told the BBC that people were gathered outside the central bank, calling on the governor to step aside.

The rial has lost up to 40 percent of its value in a week, according to Reuters.

The Associated Press noted that many merchants closed their shops in protest of the currency fall, because they said the currency fluctuations made it hard to set prices.

More on GlobalPost: Iran: Ahmadinejad blames 'enemies' for rial fall

"The sprawling bazaar has played a critical role in charting Iran's political course—leading a revolt that wrung pro-democratic concession from the ruling monarchy more than a century ago and siding with the 1979 Islamic Revolution," said the AP.

The BBC also noted the importance of the bazaar, saying that its political core, the Islamic Allied Society, known as the Motalefeh, is a political group loyal to the supreme leader, Ayatollah Ali Khamenei.

Just yesterday, Ahmadinejad said "enemies" of Iran were to blame for the fall in the rial, blaming Western sanctions which he said amounted to economic war.

The rial's devaluation and rising prices of goods have taken a heavy toll on an already weakened Iranian economy hit by economic sanctions aimed at dissuading it from pursuing a nuclear program.

Khamenei said on Wednesday, "The Iranian nation has never submitted to pressures and never will, and this is why the enemy is angry," according to Reuters.

US Secretary of State Hillary Clinton responded to questions about the protests, saying, "They have made their own government decisions - having nothing to do with the sanctions - that have had an impact on the economic conditions inside of the country," according to Reuters.

"Of course the sanctions have had an impact as well, but those could be remedied in short order if the Iranian government were willing to work with the P5+1 and the rest of the international community in a sincere manner," she said, referring to the group that consists of Britain, China, France, Russia and the United States, as well as Germany.

More on GlobalPost: Lebanon: Hezbollah stronghold hit by explosions