DUBAI, Dec 23 (Reuters) - Iran's currency hovered near a historic low against the U.S. dollar on the unofficial foreign exchange market on Friday amid renewed street protests in the restive southeast, where a prominent dissident Sunni Muslim cleric denounced a bloody crackdown on street demonstrations.
The unrest was triggered by the Sept. 16 death in detention of Mahsa Amini, a 22-year-old Kurdish Iranian who was arrested for wearing "inappropriate attire" under Iran's strict Islamic dress code for women.
The protests, in which demonstrators from all walks of life have called for the fall of Iran's ruling theocracy, has posed one of the biggest challenges to the Shi'ite Muslim-ruled Islamic Republic since the 1979 revolution.
"My advice is not to beat up citizens. No government shoots its own citizens like this one... Let soldiers stay in their barracks," Molavi Abdolhamid, an outspoken Sunni cleric, was quoted by his website as saying in a sermon at Friday prayers in Zahedan, capital of the Sistan-Baluchistan province.
The government has blamed the unrest on demonstrators bent on destruction of public property and says they are trained and armed by enemies including the United States, Israel and Saudi Arabia.
Impoverished Sistan-Baluchistan is home to Iran's Baluch minority, estimated to number up to 2 million people, who human rights groups say have faced discrimination and repression for decades.
Some of the worst unrest in recent months has been in areas home to minority ethnic groups with long-standing grievances against the state, including Sistan-Baluchistan and Kurdish regions.
After the sermon, demonstrators marched in Zahedan, chanting "Political prisoners must be freed" and "Death to the Islamic Republic", according to videos posted on social media. Reuters could not immediately verify the footage.
Meanwhile, facing an official inflation rate of about 50%, Iranians desperate to find safe havens for their savings have been trying to buy dollars, other hard currencies or gold.
On the unofficial foreign exchange market, the U.S. dollar sold for as much as 400,500 rials on Friday, slightly down from an all-time high of 401,000 on Thursday, according to foreign exchange site Bonbast.com.
"If the dollar breaks through the psychological resistance level (of 400,000 rials) and stabilises above it, the situation will become more critical and one should expect higher dollar prices," the Faraz online daily quoted analyst Mohammad Aletaha as saying.
The rial has lost nearly 21% of its value since the nationwide protests erupted more than three months ago. In May 2018, the currency was trading at about 65,000 per U.S. dollar - just before the United States withdrew from Iran's nuclear deal with world powers and reimposed sanctions on the country.
According to the activist HRANA news agency, 506 protesters had been killed as of Thursday, including 69 minors. Sixty-six members of the security forces have also been killed. It said about 18,480 people are estimated to have been arrested.
State officials have said up to 300 have been killed, including members of the security forces.
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