Currency Crisis: Protests in Iran as rial plummets

Published October 3rd, 2012 - 12:41 GMT
Protest erupt in Tehran as the rial's value plummets
Protest erupt in Tehran as the rial's value plummets

The currency crisis in Iran is reaching new lows as protests break out on the streets of Tehran. AFP are reporting that riot police clashed with protesters who are frustrated that the rial has lost a quarter of its value in the last seven days, and 80 per cent oner the last year, with several protesters being arrested. 

There are contradicting reports as to whether or not the police have closed down money-exchanges in the district of Ferdowsi, as the regime attempts to control the flight of currency, with Iranians trying to buy safer, hard currencies. The forced closure of money-exchanges is what is said to have started the protests, and there are chants to the gist of "Leave Syria, look at us!"

The Iranian president, Mahmoud Ahmadinejad, has blamed the dramatic drop in the value of the rial on what he calls the 'enemy' of his nation, a nod towards the Western sanctions being imposed over Tehran's alleged nuclear ambitions.

The sanctions are harming the oil industry in the country, with exports dropping to 800,000 a day, making the country unable to create petrodollars. Further trouble is caused for the economy by the banking system being cut off from international markets, forcing the banks to internalise all risk themselves, and not put it out to international markets.

Some in Iran are blaming the president, who is in his final term, as well as the government of either being either unwilling or unable to deal with the crisis as basic food items have shot up in price, but so too have the cost of imported medical supplies, as the policy tools used by the government are failing to work.

"The westerners make much hue and cry about sanctions sometimes…but the reality is that a little part of our economic problems is related to the sanctions" the state-backed FARS news agency quoted  Iranian Parliament Speaker Ali Larijani as saying  on Sunday.


What do you think of the currency crisis? Are Western sanctions fair on the people of Iran?

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