Wednesday, June 11, 2008

Iran pulls assets out of Europe banks

Iran pulls assets out of Europe banks

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Iran has withdrawn a huge sum of its foreign exchange reserves from European banks and has deposited some of it into Asian banks.

"Based on a decision made by a government working group, Iran has switched to 'genuine' assets like gold and shares... We have decreased our foreign currency holdings in international banks," said Iran's Deputy Foreign Minister for Economic Affairs, Mohsen Talaei.

"A portion of Iran's foreign exchange reserves, however, was moved to Asian banks," he added in his interview with Borna news agency published on Monday.

According to the official, Iran keeps only the minimum currency it needs for its accounts to remain open in Europe but manages its accounts in Asia in a way that will allow trade transactions to continue.

Iran has abandoned the dollar in oil trading in favor of the yen, citing the weakness of US currency for its decision.

Iran has been selling nearly 700,000 barrels of crude oil to Japan on a daily basis in yen since mid-2007, Talaei concluded.

The US has imposed sanctions against Iranian banks and continues to persuade countries to halt their business relations with Tehran.

While some are of the opinion that sanctions have crippled Iran's economy, the refusal of financial institutions in Russia, China and Middle Eastern countries have proven such efforts futile.

Iran's annual international trade has reportedly exceeded 65 billion dollars and some foreign banks that had frozen Iranian assets have released the country's holdings.

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