MidnightWatcher – Prophecy in Motion

By Yeganeh Torbati and Marcus George, Reuters – “Riot police clashed with demonstrators and arrested money changers in Tehran on Wednesday in disturbances over the collapse of the Iranian currency, which has lost 40 percent of its value against the dollar in a week, witnesses said.

Police fired tear gas to disperse the demonstrators, angered by the plunge in the value of the rial. Protesters denounced President Mahmoud Ahmadinejad as a ‘traitor’ whose policies had fuelled the crisis.

In a clampdown on the unofficial foreign currency market, a number of traders selling dollars were arrested after authorities ordered security forces to take action against those it sees as speculators.

The rial has hit record lows against the U.S. dollar almost daily as Western economic sanctions imposed over Iran’s disputed nuclear programme have cut Iran’s export earnings from oil, undermining the central bank’s ability to support the currency.

Panicking Iranians have scrambled to buy hard currency, pushing down the rial whose increasing weakness is hurting living standards and threatening jobs.

‘Everyone wants to buy dollars and it’s clear there’s a bit of a bank run,’ said a Western diplomat based in Tehran.

‘Ahmadinejad’s announcement of using police against exchangers and speculators didn’t help at all. Now people are even more worried.’ Read more.

A Rare Occurrence In The Saudi Currency Market Tells You That Trouble Is Brewing In The Middle East – “An important shift is developing in Saudi Arabian currency derivatives markets as Iran becomes engulfed in populist protests amid hyperinflationary pressures and armed conflict breaks out between Turkey and Syria, heightening concerns about tensions in the Middle East… [T]raders are expecting the riyal to depreciate against the dollar. Or to think about it another way, people are betting that in a year, people expect that the dollar will be able to buy more riyals than that dollar is able to buy right now. And that is something that almost never happens – unless markets are getting really worried about Saudi Arabia, one of the most stable countries in the region.” Read more.

Footage of Demonstrations Held in Tehran