Iranians protest over plunging economy as Rouhani warns of 'economic war' with US

The Iranian rial plunges to half its worth as the president's power weakens over his handling of the nuclear deal with the US.

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Huge protests in Iran as economy dips
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Protesters in Iran entered their third day of demonstrations over the country's faltering economy as President Hassan Rouhani claimed it faces "economic war" with the US.

Videos showed protesters confronting police in the capital, Tehran, as the Iranian rial plunged to 90,000 to the dollar - double the government rate of 42,000 rials to $1.

People in the Middle Eastern nation have watched their savings dwindle as shopkeepers held onto goods, uncertain of their true value.

Some of the uncertainty stems from US President Donald Trump's decision to pull his country out of a nuclear deal and re-impose sanctions on Iran.

Protesters have been demonstrating in Tehran
Image: Protesters have been demonstrating in Tehran

The demonstrations appeared to lessen slightly on Tuesday after protesters forced Tehran's Grand Bazaar to shut down temporarily the day before.

On Sunday, protesters forced two major shopping centres to close.

Witnesses described a noticeable presence of riot police in Tehran on Tuesday, something which was hardly mentioned by Iran's state-controlled media.

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Riot police were out in full force in Tehran on Tuesday, witnesses said
Image: Riot police were out in full force in Tehran on Tuesday, witnesses said

Prosecutor Abbas Jafari Doletabadi said the "main provocateurs" of Monday's protests were arrested, but did not say how many.

It remains unclear who is leading the protests, but analysts say hardliners wanting to challenge Mr Rouhani most likely sparked similar demonstrations last December and into January.

At least 25 people were killed and nearly 5,000 arrested in the largest demonstrations in Iran since months of protests following the 2009 disputed presidential election.

President Rouhani said Iran faces an 'economic war' with the US
Image: President Rouhani said Iran faces an 'economic war' with the US

On Tuesday morning, Mr Rouhani met with judges, including the head of Iran's judiciary and parliament, where he struck a hard line against America, despite being a relative moderate within Iran's theocratic government.

"We are fighting against the United States, it wants to make an economic war," the president said.

"The US cannot defeat our nation; our enemies are not able to force us to their knees."

Parliament speaker Ali Larijani, speaking at the same event, appeared to criticise the administration.

"The government hasn't done enough to confront the economic problems," he said, according to the semi-official ISNA news agency.

Mr Rouhani's power within the government appears to be abating, with some openly calling for military officials to lead the country.

Iran has also suggested it could increase its uranium production in response to the US pullout, which others fear could worsen the situation the nuclear deal sought to avoid.