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US targets Iran rial, gold imports in sanctions pressure

| | Updated on: May 16, 2013

The United States is working to block sales of gold to Iranians in order to undermine their currency the rial and to step up pressure on Tehran over its nuclear programme, officials said on Wednesday.

From July 1, the US will ban sales of gold by anyone to either the Iranian government or to Iranian citizens, a senior US Treasury official said.

Washington has warned Iran’s neighbours Turkey and the United Arab Emirates, key regional centres of the gold trade, to stop gold sales to Iran, said David Cohen, treasury under—secretary for terrorism and financial intelligence.

“We have been very clear with the governments of Turkey and the UAE and elsewhere, as well as the private sector that is involved in the gold trade, that as of July 1 all must stop, not just trade to the government,” he said.

Cohen told the Senate Foreign Relations Committee that the US government continues to find new ways to isolate Iran from the international financial system.

“In particular, we are looking carefully at actions that could increase pressure on the value of the rial,” he said.

“One thing that we have seen in the course of the last year is when the rial depreciates and depreciates rapidly, that begins to create a dynamic in Iran that has an effect.

“It has an effect on the elites and their perception of how the country is behaving.”

The move to block gold sales is part of the effort to further weaken the rial, he explained.

“There’s a tremendous demand for gold among private Iranian citizens, which in some respects is an indication of the success of our sanctions.”

“They are dumping their rials to buy gold as a way to try to preserve their wealth. That is I think an indication that they recognise that the value of their currency is declining.”

Cohen and another senior official, US State Department Under Secretary for Political Affairs Wendy Sherman, told the committee that sanctions were having a deep impact on Tehran.

He said a ban on oil exports was costing Tehran between $3 billion and $5 billion a month and caused the economy to contract by as much as 8 per cent last year.

Sherman said 14 out of 20 importers of Iranian oil have ended their purchases, and the other six — China, India, Turkey, South Korea, Japan and Taiwan — have significantly reduced their imports.

“We are continuing, of course, to press them for further significant reductions as is required under the law,” she told the committee.

Published on March 12, 2018

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