Protests erupt in Iran over plunging value of currency

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TEHRAN — Iranian police and demonstrators clashed Wednesday in protests linked to the plunging value of the national currency and government vows to crack down on illegal money changers.

Police fired tear gas and tried to disperse the protesters, who rallied outside the capital’s central bazaar. Many left their businesses and shuttered their shops.

“Our checks bounced, our businesses are ruined,” said a businessman who gave his name as Ali. “How shall we earn a living?”

At the center of the protests was discontent with Iran’s free-falling currency, the rial. The currency has lost as much as 80% of its value against the U.S. dollar in the last year.

Iranians are struggling with rising prices and devalued savings amid escalating, U.S.-led sanctions linked to the nation’s controversial nuclear program, which Iran says is for energy generation and other peaceful uses, not to build a weapon.

The poor and middle classes have been hit especially hard, as prices of food and other necessities have risen quickly.

Several garbage bins were set ablaze near currency trading areas in a bid to counter the tear gas fired by police.

The rapidly declining currency has prompted a rush on sales of gold and dollars as a guarantee against the dwindling value of the rial.

Riot police stormed the stalls of currency dealers in the capital. Some police chased escaping currency dealers in a kind of cat and mouse game. A major commercial area near the British embassy where many currency exchange houses are found was shut down.

Iranian officials have blamed currency speculators in part for the nation’s economic woes and have vowed to prosecute black market exchange houses.

But the economic discontent appeared to spread to other merchants as well.

Later in the day, some currency exchange dealers returned to their shops.

“People are cautious,” said a black market currency dealer who gave his name as Ehsan. “They cannot take a risk to buy or sell as there is no certainty that the announced prices will be stable until tomorrow.”

A retiree who gave his name as Emad said he intended to buy $1,000 in U.S. currency, despite the high exchange rate of 35,000 rials to the dollar.

“I am sure the price of dollars will go up in the weeks to come,” he said.

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-- Ramin Mostaghim. Patrick J. McDonnell in Beirut contributed.