Riot police used teargas to disperse hundreds of angry demonstrators in Tehran, chanting anti-government slogans after the value of Iranian currency plunged, sending prices in the country skyrocketing.
President Mahmoud Ahmadinejad called for calm on Tuesday but workers at the Grand Bazaar went on strike, with businessmen and workers gathering to express their fury at the fall of the rial - which has been affected by crushing sanctions imposed by the international community on the Iranian regime.
"Leave Syria alone, think of us instead" was the slogan protesters wrote on placards, according to Kaleme.com, an Iranian resistance site. Iranian leaders have supported Bashar al-Assad's regime.
Police threatened merchants who closed their shops in Tehran's main bazaar and launched crackdowns on pavement money changers on Wednesday, as part of a push to halt the plunge of Iran's currency.
But witnesses told the Guadian it is "impossible to do business in the current situation."
The head of Tehran's bazaar unions, Ahmad Karimi-Esfahani, told the BBC that shopkeepers had not opened their businesses as they were "worried about security" but he expected them to reopen on Thursday.
One witness told the Guardian : "They used teargas to disperse demonstrators in Ferdowsi Street and also blocked the streets close to the protests in order to prevent people joining them.
"Some shop windows in that area have been smashed and dustbins set on fire."
Many burnt tyres and rubbish bins. Protesters appeared to be heading for Iran's central bank, according to amateur video and police arrested many causing the disturbance.
Kalame reported that the marches were "unprecedented" but were silenced by "violent repression by police."
It said store owners had protested many times against the rise in VAT but this march had been sparked by "unprecedented economic conditions, and the protesters had been unhappy and angry about the reckless remarks said in his press conference yesterday, and the government's current foreign policy."
Other slogans held aloft, according to Kalame were "We Do Not Want Nuclear Energy", "Leave Syria Now", and "Do Not Be Afraid, We Are All Together".
The BBC's Persian service and Gmail are reportedly being blocked.
The rial has lost 57% of its value in the past three months and 75% in comparison with the end of last year, with the dollar is three times stronger than early.
Ahmadinejad blamed the rial's slump on Iran's enemies abroad, Western sanctions and dissent within the country.
But media in the country, including many news outlets usually sympathetic to the regime and President Ahmadinejad have blamed the crisis on financial mismanagement.