Protests in Iran Over Rial's Decline

Shop owners in Tehran's Grand Bazaar closed their stores and went on strike Oct. 3, reportedly marching through the center of the Iranian capital to protest the nearly 40 percent decrease in the value of the country's currency, the rial, to the U.S. dollar since Oct. 1. Eyewitnesses reported that riot police made raids on black market currency exchangers, and there were a few unconfirmed reports of arrests and clashes, but the incident appeared to be a largely peaceful, highly publicized show of law enforcement pressure on illegal currency trading.

The events of the past week come after a long decline in value for the rial that began slowly after the U.S. enactment of comprehensive sanctions on Iran in 2010 and accelerated at the beginning of 2012 after Washington added the Central Bank of Iran and other financial institutions to the sanctions. These sanctions may or may not have played a large role in the depreciation of the rial, and there are certainly other economic factors involved. Nevertheless, regardless of the technical causes of the rial's decline in value, the reported Oct. 3 protests give the appearance that the sanctions are having an impact.