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Iran: Iranian rial weakens sharply, triggering protests

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Shotlist Tehran, Iran - Recent 1. Various of buildings damaged during conflict with Israel; pedestrians taking photos 2. Various of people collecting cash from ATM, counting cash 3. Various of Bank Markazi Tower, headquarters of Central Bank of Iran 4. Amateur footage showing protests 5. Various of conference in progress, President Masoud Pezeshkian speaking 6. SOUNDBITE (Farsi, dubbed in English) Saeed Laylaz, economist: "The security situation in Iran could deteriorate significantly if socio-economically disadvantaged groups take to the streets en masse. At the beginning of the week, merchants and shop owners were the primary demonstrators, driven by instability in exchange rates." 7. Various of oil facilities at Gulf 8. Various of vessel 9. SOUNDBITE (Farsi, dubbed in English) Saeed Laylaz, economist: "Currently, Iran's role in the global oil market and international economy is negligible as reflected in its foreign trade share of under 0.4 percent." 10. Various of shop, products on shelves of, customers 11. SOUNDBITE (Farsi, dubbed in English) Saeed Laylaz, economist: "While inflation is unlikely to reach the 2022 record, hitting that level in 2026 would almost certainly trigger widespread social and political unrest." 12. Amateur footage showing protests Storyline The Iranian rial has lost nearly half its value since June, triggering widespread protests and raising fears of social instability. In addition to the economic turmoil, the country is grappling with the aftermath of a brief but intense conflict with Israel, further exacerbating the situation. Since the United States withdrew from Iran's 2015 nuclear deal in 2018 and reimposed sanctions, the rial has weakened sharply. The U.S. dollar currently trades at a rate of over 1.35 million rials on the open market. Analysts estimate inflation is running at more than 50 percent, well above the official figure of 43 percent. Soaring prices have sparked protests, with daily demonstrations in several Iranian cities since Sunday and authorities responding with tear gas. Public frustration has intensified amid international sanctions and declining trust in the government. In an attempt to address the crisis, the administration appointed a new central bank chief, though many believe the move came too late. The critical issue now confronting the country's leadership is whether the economic pain could spill over into broader, more severe social unrest, according to experts. "The security situation in Iran could deteriorate significantly if socio-economically disadvantaged groups take to the streets en masse. At the beginning of the week, merchants and shop owners were the primary demonstrators, driven by instability in exchange rates," Saeed Laylaz, an economist, said. Iran is a major oil producer, and although sanctions have curtailed its exports, global energy markets remain on high alert over fears that internal instability could disrupt the international economy. "Currently, Iran's role in the global oil market and international economy is negligible as reflected in its foreign trade share of under 0.4 percent," said Laylaz. Inflation has hit food prices harder than non-food goods and services. The costs of dairy, eggs, and beverages have risen by 72 percent year on year, forcing many families to tighten their belts. "While inflation is unlikely to reach the 2022 record, hitting that level in 2026 would almost certainly trigger widespread social and political unrest," said Laylaz. [Restrictions: No access Chinese mainland/Al-Arabiya/Persian language TV Stations outside Iran. Strictly No Access BBC Persian/VOA Persian/Manoto TV/Iran International TV]

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