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.

 

World leaders condemn Britain terror attack

UN-backed Syria talks restart in Geneva

10 Egyptian soldiers killed in Sinai roadside bombings

Erdogan warns Europeans risk being ‘unsafe’ on world’s streets

Saudi film festival launch postponed after sandstorm

Britain arrests eight as IS claims Westminster attack

Man attempts to drive into crowd of shoppers in Belgium’s Antwerp

Palestinian FA chief says ball in Israel's court

Israel arrests Jewish teen over anti-Semitic terror threats

An Egypt court is to reopen a corruption probe into Mubarak

Bahrain frees award-winning AFP photographer

Erdogan slams 'pressure' on Turks in Bulgaria ahead of vote

Israel policeman suspended after caught on video beating Palestinian

Turkey summons Russia envoy over soldier death in Syria

Bahrain sentences three to death for police bombings

EU summons Turkey envoy over 'safety' remarks

400,000 'trapped' in west Mosul's Old City

Qaeda, IS developing harder-to-detect bombs say experts

Terrorist attack at London’s Houses of Parliament

2016 saw sharp rise in illegal Israeli settlement projects

US-led coalition vows lasting victory against IS

Bahrain arrests photographer on unspecified charges

Humanitarian groups demand access to Yemen civilians suffering 'open-air massacre'

33 killed in US-led air strike on north Syria

Rights group says Libyan military committed war crimes

Israel seals East Jerusalem home of Palestinian attacker's family

Migrants in Europe at risk of drug-resistant tuberculosis

Iraqis urged to avoid hurried mass grave exhumations

Turkey steps up objection to US flight laptop ban

Britain joins US in banning laptops on flights from Turkey, Arab world

Anti-IS coalition gathers in Washington to hear Trump plan

Turkey links Gulen to murder of Armenian journalist

Kuwait bans hit movie ‘Beauty and the Beast’

Five dead in Mogadishu bombing

Khamenei fleshes out 'Made in Iran' vision

Turkey to ask US to reverse flight laptop ban

Israeli army says Hezbollah commander killed by own men

Kurds celebrate Newroz in Turkey's southeast despite shooting

Turkey’s AKP says no more campaign rallies in Germany

Chinese president calls for peace in meeting with Netanyahu

Iraq forces gain ground in Mosul

US bans electronic devices from cabins on Middle East flights

Erdogan says yes vote best response to 'fascist Europe'

Arab Israeli woman gets 50 months prison for joining IS

All Syria sides confirm attendance at Geneva talks