An Iranian fire fighter extinguishes a burned motorcycle in a street in central Tehran, near Tehran's old main bazaar, on Wednesday, Oct. 3, 2012. (Photo: AP)
Calm returned to central Tehran on Thursday, a day after it was rocked by unprecedented protests over Iran's plunging currency, but all money-changers and most shops were closed, witnesses told AFP.
The Grand Bazaar -- the normally bustling commercial heart of the city -- was mostly shuttered, with only a few streetside shops open.
Inside, the historic maze was eerily quiet on what should be a very crowded day for Tehranis, whose weekend falls on Thursday and Friday.
In the nearby traditional money-changing district, police patrolled past closed exchange bureaux.
On Wednesday, hundreds of police and security personnel flooded central Tehran, closing the exchange bureaux and arresting unlicensed money changers. Scuffles broke out with stone-throwing men, and trash dumpsters were set alight.
The police action was part of efforts by authorities to halt the dive of the rial, which is at an all-time low against the dollar.
The rate of the rial against the dollar and other foreign currencies has been censored from exchange tracking websites in Iran.
In the past week the money has shed around 40 percent of its value, sharply accelerating a slide that has gone on over this year as Western sanctions have worsened Iran's underlying economic problems.
It has started to become difficult for ordinary Iranians to afford staples, and import businesses have lost millions of dollars in a few days.
Wednesday's protests in Tehran were the first sign of public discontent.
Individual shopkeepers in the Bazaar said they closed their stores because they were unable to do any profitable business.
Police responded by warning they faced prosecution if they did not re-open, but on Thursday around nine out 10 of the Bazaar shops remained closed.
One clothing vendor who was open for business on Thursday said, on condition of anonymity: "I should be closed but I need whatever customers I could get. Maybe I will close later on. The foreign exchange situation can't go on like this."
He blamed the rial's fall mostly on the sanctions. "America wants us to bend but we have our pride," he said.
A statement by the Bazaar and Trades Islamic Society sought to distance shopkeepers from any repercussions by blaming Wednesday's closure on a plot by "hypocrites" -- Iran's word for the exiled dissident group the People's Mujahedeen of Iran -- and on "elements linked to the enemies of Islam."
It said that "despite criticism it has of the government's economic polices and the president, (it) will stand to the death to defend the regime and the country."
The crisis has fuelled intense factional in-fighting in Iran, with President Mahmoud Ahmadinejad deflecting blame to the sanctions and to hardline rival camps.
On Tuesday he called the currency crisis a "psychological war on the exchange market" imposed by the West.
His detractors -- among them possible candidates in elections next year to succeed him -- have in return pointed fingers at Iran's monetary policies, which discourage bank deposits and fail to reverse sky-high inflation and unemployment.
US Secretary of State Hillary Clinton on Wednesday added fuel to the internecine struggle by saying that "the Iranian government deserves responsibility for what is going on inside Iran, and that is who should be held accountable."
She added: "Of course the sanctions have had an impact as well but those could be remedied in short order if the Iranian government were willing to work with the P5+1 (the five permanent UN Security Council members plus Germany) and the rest of the international community in a sincere manner."
The United States and the European Union have greatly ratcheted up their sanctions on Iran this year to force it to curb its nuclear programme, which they suspect includes a drive to develop atomic weapons capability.
Iran, which denies its nuclear activities are anything but peaceful, has had its vital oil exports severely cut as a result, and is struggling to repatriate the billions of dollars its crude sales generate.
Ahmadinejad and other Iranian officials vow that, despite the sanctions, they will never bend on the nuclear issue.
"The aim of the pressure against the Iranian people is to make it yield. But it will never yield. That's why the enemy is angry," supreme leader Ayatollah Ali Khamenei said in a speech on Wednesday reported by the ISNA news agency.
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