An Iranian firefighter extinguishes a burned motorcycle in a street in central Tehran on Wednesday.
Most merchants in Tehran’s grand bazaar reopened for business Thursday as an unusually large number of police officers were deployed around the city’s black-market money trading district, witnesses reported. The reopening came a day after a crackdown on suspected speculators led to civil disturbances and a large protest march by Iranians demanding relief from the plummeting value of the currency, the rial.
Iran’s Fars news agency reported that 16 people, described as “elements of disorder in the currency market,” had been arrested during the Wednesday protests, the first outbreak of anger over the devalued rial and other acute economic problems that have been building in Iran for the past few years.
Economists have attributed the problems to government mismanagement and the Western sanctions imposed on Iran in response to its contentious nuclear program, most notably a severe restriction on the country’s ability to sell oil and its expulsion from the global banking network.
Witnesses in Tehran said there was no resumption of protests over the rial, which had fallen by about 40 percent since last week and had contributed to panic selling on the black market by Iranians worried as they watch the value of their rials evaporate. But there were also no black-market transactions in Tehran on Thursday, as traders and their prospective customers stayed away, after having been scattered by riot police officers on Wednesday.
Fars quoted the Tehran prosecutor’s office as saying the 16 suspects had been charged with “extensive exchange of hard currency beyond the banking system; of buying, selling and smuggling hard currency; forming organized gangs; making fake and unreal currency deals in order to increase the price of hard currency and to disturb public order and disrupt trade and bazaar; and gaining illegal capital by the aforementioned actions.”
As a result, the prosecutor’s office was quoted as saying, foreign currency values had spiked against the rial to unreasonable levels and the suspects had caused a “severe violation of people’s rights.”
There was no word on the identity of the suspects. Iran’s Mehr news agency reported Wednesday that two Europeans had been among those arrested.
Political economists have called the Wednesday protest a harbinger, particularly if the politically powerful merchant class in Iran loses confidence in the government. But there have been no public demands for the government to be more flexible over the nuclear issue, which could lead to an easing of the West’s anti-nuclear sanctions.
President Mahmoud Ahmadinejad and other Iranian leaders have called the sanctions the equivalent of blackmail and have vowed never to capitulate on what they call Iran’s right to peaceful uranium enrichment. Western powers say they suspect Iran’s real purpose in uranium enrichment is to develop the ability to make nuclear weapons.
The possibility of further sanctions on Iran over the nuclear issue advanced Thursday in Europe, where diplomats said European Union foreign ministers could impose new limits on Iranian gas exports during a meeting in Luxembourg on Oct. 15. Carl Bildt, the foreign minister of Sweden, said the gas restriction was among proposals under consideration.
An EU embargo on Iran oil that took effect in July has played a large role in severely restricting Iran’s ability to sell oil, its most important export.
Reverberations from the currency crisis in Iran have extended to neighboring Afghanistan, a major conduit for Iranian foreign-exchange smuggling, where the governor of the central bank, Noorullah Delawari, confirmed in a telephone interview Thursday that it had placed a $20,000 limit on the amount of dollars that individuals could take out of the country.
“We have felt a huge demand for foreign currencies and in particular the U.S. dollar and euro in our Western provinces that share the border with Iran, after the fall of the Iran currency,” the governor said.MORE IN Wire NewsDES MOINES, Iowa — Closing in on a decision about whether to again run for president, Mitt Romney... Full StoryWASHINGTON — The Federal Reserve has declared economic growth “solid. Full Story
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