Wednesday, January 25th 05:20 PM IST

Iran starts converting assets to gold to bypass sanctions

# Iran gold  # India goldl  # gold holdings  # gold for oil  

To bypass the move, authorities converted country's assets in European banks to gold and shares and another part were transferred to Asian banks.

TEHRAN(BullionStreet): Iran is reported to have started converting its foreign assets to gold and shares in an attempt to bypass sanctions.

The Islamic Republic also raised bank interest rates to boost its currency and said the country have sufficient gold reserves for 10 years.

The move came as the rial, under pressure after new U.S. sanctions targeting Iran's Central Bank, shed about 50 percent of its value relative to the dollar in the span of a month.

Analysts however said the main reason behind the currency's depreciation was a decision to lower interest rates on one-year deposits to 14 percent from 17.5 percent.

The rate cut prompted Iranians to pull their money out of banks and buy gold and foreign currency, instead

To bypass the move, authorities converted country's assets in European banks to gold and shares and another part were transferred to Asian banks.

Iran withdrew 250 tons of its gold reserves from Suisse Credit Bank worth five billion Swiss francs, and transferred them to Iran.

The European Union also agreed on Iran oil embargo, alongside freezing Iran's Central Bank assets, gold and petrochemicals trade.

Iran has withdrawn around $75 billion in assets from Europe until 2008 to prevent them from being blocked under threatened new sanctions over Tehran's disputed nuclear ambitions.

Unconfirmed reports said Iran has withdrawn gold reserves worth sixteen billion Swiss franks, from various Western monetary funds and transferred them to other unknown destinations.

In October, Iran said country's gold reserves increased by $10 billion. It is expected that Iran now holds around 500 tons of gold.

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