The impact of Donald Trump's decision to pull out of the nuclear deal is being felt in Tehran.
Protests in Iran have been triggered by economic pain caused by Donald Trump’s decision to reimpose sanctions on the country.
On Sunday the angry shopkeepers in Tehran’s in the Aladdin Pasaj, or mobile phone market and Tcharsou Bazaar, which is dominated by electronics sellers, went on strike and closed their shops.
They were demanding the government intervene to curb rampant inflation which is causing prices to change from one minute to the next.
On Monday, shopkeepers in the Grand Bazaar of Tehran, where general goods are sold, joined the protests. Crowds quickly formed on the streets, chanting slogans complaining about the state of the economy. Some criticism was reportedly also directed towards Iran’s supreme leader, Ali Khamenei.
Police responded with tear gas, detaining some of the protestors.
What are the protests about?
The Iranian rial has plunged against the international currencies needed for foreign trade, losing half its value in less than a year. Back in October 2017, one euro would buy 45,000 Iranian rials, a figure that last week passed 100,000. The cost of a dollar has jumped from 35,000 rial to 90,000.
These rises have wrecked havoc with inflation, causing steep price rises for anything imported or manufactured using imported products. The process of buying and selling virtually ground to a halt, as no one was willing to make a sale knowing the money they took would have lost value before they could get it to the bank.
What is the government doing?
Following the withdrawal of the US from the Iranian nuclear accord, sanctions imposed by Donald Trump’s administration made it risky for any international companies to do business in Iran. Some of the biggest foreign business which had operated in the country – including oil giant Total and PSA which owns the Peugeot and Citröen brands – pulled the plug on planned projects. The Iranian government has sought to put pressure on the countries remaining inside the deal, especially the European Union, to ensure trade and investment continued, threatening to restart enriching uranium otherwise. But so far, despite words of support, European leaders have had little success in persuading businesses to defy Trump.
To tackle the currency issue specifically, the government has banned financial exchanges from buying or selling foreign currency, but the trade has just moved to the black market, with corresponding additional risks and volatility.