Author: Radikal (Turkey) Posted July 3, 2012
Iran has exchanged a total of $3 billion of its reserves for gold in financial operations via Turkey. The operation was revealed by Turkey’s official foreign trade statistics.
Iran is currently under trade and financial sanctions imposed by the US and the EU. It cannot export its oil or import vital commodities, such as necessary foodstuffs. Its SWIFT system, which is the basic payment transfer instrument of international banks, is blocked. Iranian banks cannot transfer dollar payments, nor can they receive a single dollar to their accounts. One of Iran’s available alternatives is to physically hold gold and use it to affect payments, but this is obviously not a fast, practical or even effective payment system. It forces Iran to undertake troublesome border trades with neighbors or devise unconventional methods of transportation.
According to the foreign trade data, our exports to Iran averaged $267 million per month from March to May in 2011. For the same three months this year, however, our exports to Iran reached averages of $703 million, $1.47 billion and $1.63 billion per month, respectively. This roughly translates to 58 tons of gold exports worth $3 billion for those three months. In foreign trade, gold transactions are under item 71, which covers “pearls, precious and semiprecious stones, precious metals, custom jewelry and coins.” The total exports of $995 million in March-May 2011 climbed up to $4.035 billion for the same period this year. The $3 billion difference matches the overall $3 billion increase in exports to Iran. Note that we are talking about gold bullion.
But for Turkey to export this much gold, it must also import it. When you look at import figures, it is clear that the gold exported to Iran was first imported to Turkey. This gold was physically imported to Turkey in the July-October 2011 period while its export to Iran happened in the March-May 2012 period.
The importation of the gold, as well as its safekeeping and subsequent export to Iran were clearly undertaken by a Turkish bank or company. Such transactions are legal.
Another interesting point to note is that Iran’s hoarding of gold after July 2011 corresponds with the decision of Turkey’s Central Bank to facilitate the payment of liabilities in gold by Turkish banks.
In sum, Iran has managed to transform $3 billion of its cash reserves, which were frozen in foreign banks and could not have been used, into gold.
Read More: http://www.al-monitor.com/pulse/business/2012/07/irans-gold-operation.html