A protest and scuffles with police occurred in central
Tehran Wednesday in the first sign of public unrest over Iran's plunging currency, which this week has
lost more than half its value.
Hundreds of police in anti-riot gear stormed the capital's currency exchange
district of Ferdowsi, arresting illegal money changers and ordering licensed
bureaus and other shops closed, witnesses told AFP.
Several arrests were seen, carried out by uniformed police or plain-clothes
security officers.
Smoke was seen in two places in the area.
Some appeared to come from a dumpster set on fire near the U.K.
embassy--evacuated last year after pro-government demonstrators stormed it.
The source of the other smoke couldn't be determined, with police directing
pedestrians and vehicles away.
Individuals threw stones at police officers and a police car before running
away, witnesses said.
A protest in Tehran's historic Grand Bazaar--a maze-like complex of shops vital
to the city--also took place but was quickly put down by police.
"We closed because we don't know what is going to happen" in terms of
the currency market, one shopkeeper said.
A police commander, Colonel Khalil Helali, was quoted by the Mehr news agency
as saying police were going to take action against shopkeepers who closed their
businesses, for "disturbing" the situation.
The head of the national police, Esmail Ahmadi Moghadam, was quoted by the Fars
news agency as saying a special unit comprised of police chiefs and government
economic officials had been created "to combat those perturbing the
currency market."
He added that many people were keeping stashes of foreign currency and gold at
home, "which is having a negative effect on the economy."
The crackdown was an apparent bid to halt a dramatic plunge in the value of Iran's currency this week.
Tuesday, President Mahmoud Ahmadinejad said Western sanctions are mostly to
blame. But rivals said his mismanagement of the economy is the main cause.
One money changer said almost no transactions were taking place in the market,
making any valuation unreliable, but the assumption was the rial had stabilized
early Wednesday around 34,000 to the dollar.
Online websites that normally track the currency market were censored, none
giving the rial's value against the dollar.
Tuesday, the rial closed around 36,100 to the dollar.
A week ago, it was trading around 22,000 to the greenback and at 13,000 a year ago.
The currency's plunge has greatly increased inflation in Iran, which is widely seen as far higher than the
official 23.5% given by the central bank.
Food costs, notably, have spiralled, to the concern of Iranian families. Merchants,
some of whom have lost millions of dollars in a day, say doing business has
become nearly impossible.
The U.S. government has said it sees the rial's plunge as proof Western
sanctions are having a big impact on the Islamic republic's economy.
But Ahmadinejad said even with the "psychological war on the exchange
market," Iran won't be pressured into curbing its nuclear
activities--the stated aim of the sanctions.
"We are not a people to retreat on the nuclear issue," he told a news
conference in Tehran. "If somebody thinks they can pressure Iran, they are certainly wrong and they must correct
their behavior."
Iran, he said, has sufficient foreign currency
reserves.
Those reserves were estimated around $100 billion at the end of last year,
thanks to surging oil exports.
But Iran's oil revenue has been decimated since,
because of the sanctions. The U.S. Treasury estimated Iran's foreign earnings have been cut by $5
billion a month.