Wednesday, July 3rd 03:31 PM IST

Latest Gold sanctions begin to hit Iran economy

# Iran gold sales  # Turkey gold  # US sanctions  

The latest is expanding the number of penalized industries and imposing rules that theoretically could halt all gold and currency trade by the country.

NEW DELHI(BullionStreet): As a change of rule in Iran with the victory of Hassan Rouhani is about to take place, the US have imposed an arsenal of sanctions against Iran.

The latest is expanding the number of penalized industries and imposing rules that theoretically could halt all gold and currency trade by the country.

Many analysts are of the view that the sanctions came at a wrong time as they believe Rouhani's victory opened a new path for Iran to engage constructively with the international community and ease tensions.

Rowhani has promised to engage constructively with the world and ease tensions raised by Tehran’s nuclear ambitions and sanctions.

They said the US led sanctions were aimed at isolating the Islamic Republic further at a time Iran is trying to rebuild from the dreadful Ahmedinejad era.

Instead of trying to resolve the standoff through dialogue with the new president,the Americans are on to more tactics like creating panic among Iranian people by passing the sanctions that went into effect from Monday.

The sanctions began its impact as country's currency, the Rial, which had been steadily declining, sank to unprecedented lows. At the beginning of the Persian year, the U.S. dollar was equivalent to about 11,000 Rial. After the EU announcement, it was worth 21,000 Rial.

In contrast, the price of gold rose as Iranian citizens scrambled to convert their increasingly worthless rials. Gold coin prices sky rocketed from 4,350,000 Rial to more than 10,500,000 rial in three weeks.

Years of ratcheting-up sanctions has forced Iran to diversify its economy after profits from export of crude oil were down 50 percent by late 2012

What could be the outcome of the present sanctions is a big question but Iran will soon witness a significant wave of domestic bankruptcies, analysts said.

They added that after the exit of gold trade, Iranian manufactures and business owners who have to pay off debts will not stand a chance and might result in a complete stoppage of dealings that could trigger a possible standstill of the economy.

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