Street Clashes in Tehran Over Plummeting Rial

By ABC News

Oct 3, 2012 1:27pm

ABC News’ Lara Setrakian reports:

Protesters and riot police clashed in the streets of Tehran today in confrontations over Iran’s faltering currency, the rial.

Reuters reports that exchange dealers and demonstrators were dispersed with tear gas, and Agence France Press says police ordered shops in the money changing district to close.

The rial has tumbled 60 percent in value this year,  falling 30 percent in this week alone. The tumbling currency is a sign of strain in Iran’s economy,from U.S.-led sanctions over its nuclear program.

A strict round of new measures made it more difficult for Iran to conduct foreign trade and international banking, including its economically critical sales of oil. Think tank Oxford Analytica estimates Iran has lost a quarter of its oil revenue as a result. With the sinking rial the cost of food and everyday items in Iran has soared, leading to public frustration that today appeared to bubble over.

Sanctions are meant as punishment for Iran’s escalating nuclear program. Washington and its allies suspect Iran of pursuing technology toward a nuclear weapon, a charge Iran denies. With no diplomatic breakthrough in the standoff between Iran and the West, analysts worry the tensions could lead to an armed confrontation in the Persian Gulf.

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