First Published: 2008-02-06

 
Iran says Gulf shields its banks from US pressure
 

Iran: US pressure not likely to make Gulf states sacrifice beneficial economic ties with Tehran.

 

Middle East Online

By Daliah Merzaban - MANAMA

Money talks

US allies such as Bahrain and the United Arab Emirates are helping shield Iran's banking system from Washington's "financial terrorism", the governor of Iran's central bank said on Tuesday.

The United States has been trying to cut Iran's access to the global financial system, including by putting pressure on Gulf Arab governments to isolate Iran, which it accuses of seeking nuclear weapons.

The pressure is not working because cultural, political and economic ties between Gulf oil producers were too strong, Tahmasb Mazaheri told the Reuters Islamic Finance Summit.

"Neither us nor our neighbors will sacrifice our long-term interests because of the unilateral pressures," Mazaheri said.

"Particularly in the region, Bahrain and the Emirates and other neighbors all around Iran's borders, we have a lot of partners who are working with us in the long term," he said.

He did not explain what form their assistance took.

Iran, which denies the nuclear charges, has long had close economic ties with Gulf states, especially in the UAE and Bahrain, Arab allies of Washington and home to the Middle East's biggest financial centers.

Even so, banks in the world's top oil-exporting region have bowed to pressure from the United States to make doing business with the Islamic Republic more difficult.

Bahrain's largest lender by market value, Ahli United Bank AUBB.BH, had "frozen" banking activity with Iran, where it operates an affiliate Future Bank with two Iranian partners, two sources familiar with the matter said last month.

Lenders in the UAE, meanwhile, have been holding off on issuing letters of credit to Iranian companies, bankers in the second-largest Arab economy said last month.

Foreign banks have been yielding to pressure, too. France's BNP Paribas and Calyon, the investment banking arm of Credit Agricole, stopped offering Letters of Credit on Iranian fuel imports because of pressure from Washington.

"The pressure is a unilateral pressure," Mazaheri said.

"I call it kind of financial terrorism in the financial industry ... and it cannot be tolerated by the global financial system," he said.

"The central bank assists Iranian private and state-owned banks to do their commitments regardless of the pressure on them," he said.

The US, which has a naval base in Bahrain, is pressing the United Nations to tighten sanctions on Iran, the second-largest oil producer in the Organization of Petroleum Exporting Countries.

Iran, also holder of the world's second-largest reserves of natural gas, was retaliating by diversifying its more than $72 billion of reserves away from the weak US currency, Mazaheri said.

"We have tried to avoid keeping dollars and giving the dollar the benefit (of demand from our reserves)," he said, declining to give a breakdown of the reserves.

The central bank's motivations for diversifying its reserves were both "political and also because of the trend of the weakening dollar", Mazaheri said. The dollar fell to record lows against the euro and a basket of major currencies last year.

 

Thousands of Yemen troops side with President Hadi

Egypt sentences 11 football fans to death in retrial after 2012 riot

‘Islamic State’ claims executions of Ethiopia Christians in Libya

Israel pledges to transfer frozen taxes to Palestinian Authority

Iraq PM's spokesman resigns over pro-Saddam song

Tunisia prevents departure of more than 12,000 would-be jihadists

Unidentified gunman opens fire on pro-Kurdish party office in Turkey

'Differences' emerge in Libya peace talks

Saudi Arabia vows to cover UN aid appeal for Yemen

Iraqi forces kill Hussein deputy in Salahuddin province

Iraq massacre site turns into memorial

Israeli coalition talks approaching deadline

Turkish PM condemns EU resolution on Armenian genocide

Tehran calls for immediate Yemen peace talks

Assad accuses Turkey of torpedoing UN Aleppo truce plan

New round of Libya rival talks in Morocco

EU urged to label Israeli West bank products

General Dempsey: Military option on Iran 'intact'

UN chief calls for immediate Yemen ceasefire

Abadi to Iran: We welcome your help as long as you respect Iraq sovereignty

Anger in Indonesia as Saudi Arabia executes second woman

France jihadist attacks fuel unprecedented rise in Islamophobia

Turkey mine chief: ‘I am not a murderer’

France sees progress in Rafale jet negotiations with UAE

Lebanese TV contempt trial opens at slain Hariri tribunal

Fresh round of Iran nuclear talks April 22-23 in Vienna

Yemen calls on renegade army units to drop support for Huthis

UN envoy condemns Libya air strike as 'unacceptable'

African migrants’ hope of reaching Europe dashed

Armenian senior advisor to Turkish PM retires

Egypt to demolish ousted Mubarak’s party HQ

Slow turnout in Sudan polls

UN peace envoy to Yemen quits

Reconquest of all of Anbar remains out of reach for now

Iran holds Obama 'accountable' for fate of nuclear agreement

Arab coalition mulls large-scale manoeuvre in preparation for ‘ground assault’

Libya appeals for Russia support over arms embargo

Turkey vows to brush off any EU genocide decision

Bashir heads toward widely expected victory with ‘empty ballot boxes’

Rebels in southern Syria reject all forms of cooperation with Qaeda affiliate

21 million children in MENA region at risk of having no education

Two military cadets killed in Egypt bombing

Egypt, Saudi consider holding joint military exercise

Kerry 'confident' US can reach Iran nuclear deal

Libya rival talks in Algiers 'great success'