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.

 

Iraq operation to liberate Anbar faces barrage of criticism

Coalition raids target headquarters of rebel troops in Yemen capital

Libya PM survives assassination attempt

EU calls for resumption of Palestinian-Israeli peace talks

Arrest of several FIFA leaders as part of twin corruption inquiry

Fast pace of executions in Saudi Arabia 'very disturbing'

Tunisia begins hearings into ex-regime's rights abuses

‘Islamic State’ executes 20 men in ruins of Syria ancient city

Saudi Arabia announces sanctions against two Hezbollah leaders

Libya to fight aggression with 'strength'

Iran says nuclear talks could go beyond deadline

Hamas accused of committing war crimes against civilians

German court rejects Yemenis' case over US drone killings

Kuwait emir urges Muslim states to fight extremism

NY Times journalist has Turkish citizenship revoked

Military site inspections necessary to Iran deal

Iraqi forces on outskirts of Ramadi

Syrian refugees ignored at Turkey poll campaign

Director 'shocked' at Morocco’s prostitution film ban

US criticises Shiite name of Iraqi military operation

Israel warplanes strike Gaza after rocket attack

Pro-government fighters retake Yemen city from Shiite rebels

Libya militias trap civilians in Benghazi

EU border agency plans to expand migrant rescue operation

Syria state TV blames ‘foreign enemies’ for signal jamming

Palestinians and jihadists clash in Yarmouk

Iraq refugees forced back into conflict zones

Kuwait restores Islamist lawmaker's citizenship

Washington Post reporter goes on trial behind closed doors in Iran

Iraq launches operation to drive ‘Islamic State’ from Anbar

New airport in restive eastern Turkey

Iran ‘thwarts’ US cyber attack on Oil Ministry’

Egypt opens border crossing with Gaza for 48 hours

Litany of problems keep Iraqi army weak and ineffective

Rouhani: most Iranians favour peace

Iran Foreign Minister discusses Yemen conflict in neutral Oman

Palestinians dismiss Netanyahu initiative

Three Moroccans jailed for homosexuality

Oxfam: 16 million Yemenis have no access to clean water

US, Iraq at loggerheads over Ramadi

Soldier kills comrades in Tunisia barracks shooting

Netanyahu names rightist ally as new Foreign Ministry chief

Iraq rejects US criticism of security forces over defeat in Ramadi

Hezbollah captures hilltops from Qaeda wing in Syria

Saudi Shiites hold mass funeral for victims of mosque bombing