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Iran police break up protests over currency crisis Iran police clash with protesters over currency crisis
(35 minutes later)
Riot police in Iran have broken up several protests in the capital over sharp falls in the currency, the rial. Riot police in Iran have clashed with protesters in the capital over sharp falls in the currency, the rial.
Traders protested outside the central bank, calling for the resignation of the government and the bank's governor, eyewitnesses told the BBC. Tear gas was used to disperse the demonstrators, some of whom were setting fire to tyres and rubbish bins. There were many arrests, reports say.
A heavy police presence remains on the streets of Tehran, following this first sign of public unrest. Eyewitnesses told the BBC that scores of people gathered outside the central bank, calling for the governor to stand down, chanting anti-government slogans.
The rial has plummeted to record lows against the US dollar in recent days, harming the wider Iranian economy. The rial has plummeted to record lows against the US dollar in recent days.
Up to 100 merchants from Tehran's bazaar gathered in front of Iran's central bank, eyewitness told BBC Persian. They were attacked by riot police, using tear gas, and dispersed. Up to 100 angry traders and official money lenders gathered in front of Iran's central bank. But they were attacked by riot police and dispersed, eyewitnesses told BBC Persian.
Reports say many shops in the central Grand Bazaar have also brought down their shutters in sympathy with the demonstrators. Experts say several factors are at work. The main underlying one is the impact of Western financial sanctions. Iran's foreign currency income from oil exports has been squeezed. With fewer dollars in the system, their value relative to the local currency has gone up.
In addition, nervous Iranian savers have rushed to swap their rials for hard currency dollars, further exacerbating the pressure on the Iranian currency.
And then there is the Tehran government's faltering policy response. Longstanding measures designed to hold up the value of the rial appear to be breaking down.
In the past, importers of food, medicines and other priority areas were supplied with dollars at much lower than market rates.
The scope of these arrangements has been cut back, which means previously favoured importers are now scrambling to acquire dollars on the open market, driving the price of those dollars even higher.
Reports say many shops in the central Grand Bazaar have brought down their shutters in sympathy with the demonstrators.
Traders are angry at the lack of direction from the government in the crisis, which they say has led to more instability in prices, making trading almost impossible, says BBC Persian's Kasra Naji.Traders are angry at the lack of direction from the government in the crisis, which they say has led to more instability in prices, making trading almost impossible, says BBC Persian's Kasra Naji.
Iranian President Mahmoud Ahmadinejad blamed Western sanctions for the fall in the rial, saying they amounted to an economic war. The head of Tehran's bazaar unions, Ahmad Karimi-Esfahani, said shopkeepers had not opened their businesses as they were "worried about their security" but he expected them to reopen on Thursday.
But US officials say the slide reflects the success of US economic sanctions targeted at Iran's controversial nuclear programme. He said a protest outside the bazaar started with a small group and then grew, he told the Iranian Labour News Agency (Ilna).
Iranian Industry Minister Mehdi Ghazanfari said speculators were responsible for the fall. A senior Iranian police commander confirmed to Ilna that "a limited number of people protested in front of the bazaar," but he said the bazaar was not closed.
The authorities are now taking action against illegal traders. Eyewitnesses say they have been arrested in the area where they normally do business in the capital. Hundreds of police are also reported to have rounded up and arrested illegal money changers in the capital.
Iranian President Mahmoud Ahmadinejad has blamed Western sanctions for the fall in the rial, saying they amounted to an economic war.
However, many Iranians accuse him of financial mismanagement.
US officials say the slide reflects the success of US economic sanctions targeted at Iran's controversial nuclear programme.
In a separate development, the speaker of parliament, Ali Larijani, who was due to give a news conference has cancelled it without explanation.In a separate development, the speaker of parliament, Ali Larijani, who was due to give a news conference has cancelled it without explanation.
He was expected to respond to President Ahmadinejad's accusation that he had undermined the government and lacked ideas on how to deal with the crisis.He was expected to respond to President Ahmadinejad's accusation that he had undermined the government and lacked ideas on how to deal with the crisis.
Are you in Tehran? Did you witness the unrest? Send us your accounts using the form below.Are you in Tehran? Did you witness the unrest? Send us your accounts using the form below.