Wednesday, January 9th 11:58 AM IST

Turkish banks deny links in Iran Gold trade

# Iran gold reserves  # Gold exchange  # Central Bank of Iran  

According to bankers they are always careful in transactions and about the source of the money or the identity of the customer; however, have not faced any extra ban with regard to gold transactions.

ISTANBUL(BullionStreet): Major banks in Turkey denied any links over country's gold trade with Iran and said that it was business as usual for their gold trading desks.

According to bankers they are always careful in transactions and about the source of the money or the identity of the customer; however, have not faced any extra ban with regard to gold transactions.

Turkish bankers also said the trade with Iran was not being handled through them. They added that Iran is not carrying out its gold trade via the Turkish banking system and do not face any pressure regarding this issue.

It is the private sector selling gold to Iran. Interbank gold trading is not particularly common among Turkish banks, though lenders usually swap dollars for gold as the central bank allows them to keep a portion of their forex reserve requirements in gold.

Analysts however said banks are continuing to exchange gold in Turkey, despite U.S. pressure over the country’s booming gold-for-gas trade with Tehran, which helps Iran cope with international sanctions.

Turkey’s Deputy Prime Minister Ali Babacan said that the lira Iran received from Turkey for its gas was being converted into gold because sanctions meant that it could not transfer cash into Iran.

Turkey is Iran’s biggest natural gas customer, but Western sanctions prevent it from paying Tehran in dollars or euros. Iran is instead paid in Turkish lira – of limited value on international markets but ideal for buying gold in Turkey.

Turkish Economy Minister Zafer Caglayan said last week that the gold sales to Tehran would continue, saying the trade was carried out entirely by the private sector rather than between states and was not subject to sanctions.

Gold exports from Turkey to Iran jumped to $6.5 billion in the first 11 months of 2012 from just $54 million for all of 2011, as the United States tightened sanctions over Iran’s disputed nuclear program.

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