TEHRAN, Iran -- The first outbreak of public anger over Iran's collapsing currency and other economic maladies jolted the heart of the capital Wednesday, with riot police violently clamping down on black-market money changers, hundreds of citizens marching to demand relief and merchants in the sprawling bazaar closing their shops in protest.
Iran's official media said an unspecified number of people, including two Europeans, had been arrested in the turmoil, which was documented in news photos, at least two verifiable videos on YouTube and witness accounts.
Economists and political analysts in Iran and abroad said the anger reflected the accumulated impact of Western economic sanctions over Iran's disputed nuclear program, as well as the government's inability to manage an increasingly acute economic crisis.
It came a day after Iran's president, Mahmoud Ahmadinejad, said at a televised news conference that the plunge in the value of Iran's currency, the rial -- which has fallen by 40 percent against the dollar this past week -- was orchestrated by ruthless currency speculators, the United States and unspecified internal enemies of Iran. He urged people to stop selling their rials for dollars, a currency he once characterized as "a worthless piece of paper," and warned that speculators faced arrest.
But Mr. Ahmadinejad, whose economic stewardship has been increasingly challenged by other Iranian politicians in the last year of his term, offered no new solutions to arrest rial's slide, which is a major inflationary threat and has become the most visible barometer of Iran's economic travails. Because of the sanctions, Iran is facing extreme difficulties in selling oil, its main export. The country is also finding it difficult to repatriate dollars and other foreign currencies because it has been cut off from the global banking system.
Unscripted protests in Iran are unusual, particularly since the nation's political opposition was crushed after Mr. Ahmadinejad's disputed re-election in 2009. Iran experts said the outbreak Wednesday was significant because it appeared to offer an insight into the degree of public weariness.
"It may not be widespread yet, but it demonstrates not just unhappiness with the Ahmadinejad government, but also dissatisfaction with the Islamic Republic's failure to stem the economic crisis brought about by incompetence, mismanagement and sanctions," said Alireza Nader, a political analyst at the RAND Corp., a research and consulting firm. He said "the regime is going to face much greater instability in the future, especially if it loses the support of Iran's business and merchant class."
The unrest caught the attention of Secretary of State Hillary Rodham Clinton, who, speaking from Washington, rejected Mr. Ahmadinejad's explanation for the rial's plunge. She suggested that conditions would improve if Iran engaged in meaningful negotiations over its nuclear program, which Western powers and Israel suspect is meant to develop nuclear weapons, but which Iran says is for peaceful purposes. "I think the Iranian government deserves responsibility for what is going on inside Iran," she told reporters. "And that is who should be held accountable."