Wednesday, October 3, 2012

Clashes Reported in Tehran as Riot Police Target Money Changers

Clashes erupted in the center of the Iranian capital on Wednesday between money changers and security forces after riot police on motorcycles used batons and tear gas to shut down a long-tolerated black-market for foreign currency, witnesses reported.
It was the first instance of a violent intervention over the money-changing business in Tehran since the national currency, the rial, which has been gradually losing value in recent years, dropped drastically over the past week, losing 40 percent of its worth against the dollar, to a record low. Economists have called the rial’s plunge a stark reflection of the economic pain in Iran caused in part by the Western sanctions on Iran’s disputed nuclear program.
Witnesses in and around Manoucheri Street, where the black-market money changers do business, described cat-and-mouse chases between motorized riot police and money changers. It was unclear whether there were injuries or arrests. It also was unclear whether the clashes had been confined to the immediate area or had spread.
The violence came a day after President Mahmoud Ahmadinejad, in a nationally televised news conference, asked Iranian citizens not to sell their rials for other currencies, suggesting the problem had been caused in part by speculators.
Mr. Ahmadinejad also warned that a “band of 22 people” with the power to manipulate exchange rates could face arrest, and he accused the United States and unspecified “domestic allies” of waging a psychological war on the country.
As the clashes erupted on Wednesday, garment and jewelry merchants in the city’s main bazaar, less than a mile away, closed their shops, apparently in protest. The semiofficial Mehr news agency said the bazaar, the heart of Tehran’s commercial center, had been closed for “security reasons.”
The secretary-general of the Tehran Bazaar and Trade Union, a powerful official close to the government, accused unspecified outside instigators of pressuring  bazaar merchants to close their shops. The official, Ahmad Karimi Esfahani, was quoted by the Iranian Labor News Agency as saying that most merchants had wanted to remain open for business. “Those now present are trying to show the bazaar as closed,” he was quoted as saying. “They are guided by foreigners.”
Other bazaar traders hinted that the closure of the bazaar was organized by powerful opponents of Mr. Ahmadinejad, who were trying to make him look weak by closing down Tehran’s most popular shopping center.
Members of Parliament and Shiite Muslim clerics have been calling for an end to the black-market currency trade, accusing the money changers of driving down the rial’s value. Others have called upon the government to buy up rials and sell dollars and other foreign currencies warehoused in the central bank’s reserves to restore stability to the national currency.
In the last weeks, traders and regular citizens had gathered by the hundreds on Manoucheri Street in Tehran to buy foreign currencies in anticipation of further weakening in the rial.
During the past months some Iranian leaders and clerics have warned against social unrest over the worsening economic malaise in the country. The fall in the currency’s value has presented Iran with enormous economic risks, including the possibility of starting a severe bout of inflation, which is already high. A rising sense of economic crisis in Iran could also pose new political challenges for the country’s leaders

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at and on twitter at :!/LaunderingMoney  and