Iran withdrawing gold reserves from western banks.
Iran Sees Large Inflow of Gold and Capital: FT
TEHRAN TIMES ECONOMIC DESK
TEHRAN -- Iran has experienced a net inflow of capital and gold bullion for the
first time since the 1979 Islamic Revolution. It has been drawn by domestic
investment opportunities and driven by financial insecurity outside the country
following the September 11 attacks on the U.S., the Financial Times reported on
Tuesday.
Bankers say the amounts returning to Iran probably totaled several billion dollars
over the past year -- although they are not on a scale comparable with the outflow
of Saudi capital from the U.S. Official figures have not been disclosed.
The fear of collapsing stock markets is considerable but, more significantly, so
is the danger of private assets being frozen by a hostile U.S. government that
has branded Iran as part of an "axis of evil".
That sense of insecurity, according to one banker, persuaded the Iranian
government to repatriate all or most of its gold bullion from the vaults of central
banks in Europe.
"They were worried that the post-September 11 world order had changed and
that it was safer to have the gold at home," he said.
According to official figures, Iran's gold is valued at around $2.5bn. Much of that
was deposited in the Bank of England, which declined to comment.
Bankers suspect that tighter policing of money laundering in the West was also
a factor behind the return of some capital to Iran. This in turn has prompted the
government in Tehran to start drafting its own first law on money laundering.
Bankers generally believe that the improving domestic investment climate,
fueled in part by high oil prices, has acted as a powerful magnet for capital that
has long flowed in the opposite direction. The Central Bank has kept the value of
the rial steady against the dollar for the past two years, while maintaining interest
rates that yield an annual 17 percent on bonds.
The inflow of capital has triggered a surge on Tehran Stock Exchange -- one of
the world's best performing but most poorly regulated markets -- and a
construction boom with soaring property prices.
The Tehran exchange saw its trading volume rise by 170 percent in the six
months to September, while the all-share index rose 26 percent. |
