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Protesters clash with police over Iran currency crisis

  • Protesters in Iran have clashed with riot police in Iran following demonstrations over sharp drops in the country’s rial currency.

    Tear gas was used to disperse the protesters on Wednesday, with several arrests made over the course of the day.

    Amateur video footage posted online showed hundreds of people marching towards Iran's central bank in the capital, Tehran.

    The rial has plunged to historic lows against the U.S. dollar over the past week. On Tuesday, the rial plummeted to 37,500 against the dollar in the free market from about 34,200 at the close of trade the previous day. On Monday last week, it traded at around 24,600.

    President Mahmoud Ahmadinejad has blamed Western sanctions targeted at Iran's contested nuclear program for the depreciation, saying it equated to an economic war.

    The drop in the rial comes a week after the Iranian government set up a new three-tiered currency system in a bid to restore stability to the currency.

    The system, along with a new “exchange center”, enables importers of priority goods such as meat and grains to buy dollars at the official "reference" rate of 12,260 rials to the dollar.

    Importers of other basic goods can buy dollars at a "non-reference" rate 2 percent less than the open market value of the rial on any given day.