Iran currency crisis sparks Tehran street clashes

Police fire teargas at demonstrators and bazaar closes, with merchants unwilling to quote prices as value of rial plunges

Iranian riot police have clashed with demonstrators and foreign exchange dealers in Tehran over the collapse of the country’s currency, which has lost a third of its value against the dollar in a week, according to witnesses.

Police fired teargas to disperse demonstrators angered by the plunge in the value of the Iranian rial. Protesters shouted slogans against the president, Mahmoud Ahmadinejad, saying his economic policies had fuelled the economic crisis.

The rial has hit record lows against the US 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 running at around 25%, the currency’s weakness is hurting living standards and threatens to worsen a recent spate of job losses in Iran’s industrial sector.

Tehran’s main bazaar, one of the city’s major shopping areas, is closed, witnesses say. A shopkeeper who sells household goods there told Reuters the instability of the rial was preventing merchants from quoting accurate prices.

A bazaar official, Ahmad Karimi Esfahani, told the Iranian Labour News Agency that the bazaar had been closed because of shopkeepers’ safety concerns but would reopen on Thursday.

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