DEBKAfile Exclusive Report January 23, 2012, 5:57 PM (GMT+02:00)
By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank's assets and the oil embargo which the European Union's foreign ministers agreed to impose Monday, Jan. 23. The EU currently buys around 20 percent of Iran's oil exports.
The vast sums involved in these transactions are expected, furthermore, to boost the price of gold and depress the value of the dollar on world markets.
Iran's second largest customer after China, India purchases around $12 billion a year's worth of Iranian crude, or about 12 percent of its consumption. Delhi is to execute its transactions, according to our sources, through two state-owned banks: the Calcutta-based UCO Bank, whose board of directors is made up of Indian government and Reserve Bank of India representatives; and Halk Bankasi (Peoples Bank), Turkey's seventh largest bank which is owned by the government.
What Does It Mean
A grim Ministry of Finance report prepared for Prime Minister Putin is warning today that the decision by Iran to cease taking US Dollars for its oil could very be the “first shot” fired in World War III, and one which Russia will be blamed for by the Obama regime.
According to this report, Iran swiftly countered planed US sanctions against its Central Bank yesterday by announcing that it will no longer accept the US Dollar as payment for its oil shipments to India, Japan and China, and further announced that bilateral trade between itself and Russia will, also, break from the US Dollar for settlement in favor of the Iranian Rial and Russian Rubles.
UK retailers paying in yuan
A shop assistant accepts a China UnionPay bank card at a Selfridges' store in London. Many British retailers choose to pay their Chinese suppliers in yuan. [Xinhua]
A growing number of British retailers are paying their Chinese suppliers in yuan.
"Businesses have been talking about the possibility of paying in local currency since the yuan's peg was relaxed in June 2010," Sam Ford, head of Risk Solutions at Barclays Capital, told China Daily in an exclusive interview.
But it is only in recent weeks that the talk has turned into trades for Barclays' clients, Ford added.
According to Barclays Capital, the investment banking division of Barclays PLC, more British retailers are paying in yuan to achieve cost savings of up to 8 percent.
Sudan Sheds the DollarThe Sudanese government early last month has formally requested from China that their bilateral trade be conducted in Sudanese pounds and Chinese Yuan rather than U.S. dollars.
The Sudan’s Central Bank Governor Mohamed Khair al-Zubeir said that “they have submitted an official request to China to deal with them in Sudanese pounds and Chinese Yuan, and it is possible that after a short while they could exit finally from the dollar.”
“The dollar has become weak and is deteriorating,” Al-Zubair said while speaking to the press in the country’s capital Khartoum and that its one of the policies his bank has come up with to control the flow of the currency and maintain the valve of the country currency.
The governor did not say what benefits Sudan would get out of the switch but emphasized the rising economic power of China.”We believe that very soon China will become the number one economic power in the world,” al-Zubeir said.
China is Sudan’s top trading partner and according to 2010 figures it topped $10 billion.
Mexican Government successfully sheds the US Dollar from its economy
The Mexican government in September 2010 enacted a new law which basically restricts the use of US Dollars for almost all purchases inside of Mexico.
China, Russia quit dollar
By Su Qiang and Li Xiaokun (China Daily)
Updated: 2010-11-24 08:02
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Premier Wen Jiabao shakes hands with his Russian counterpart Vladimir Putin on a visit to St. Petersburg on Tuesday.ALEXEY DRUZHININ / AFP