Turkey Swaps Gold for Iranian Gas
Loophole in Western Sanctions Allows Iran to Buy Gold in Turkey With Turkish Payments for Gas Imported From Iran
The continuing trade deal offers the most striking example of how Iran is using creative ways to sidestep Western sanctions over its disputed nuclear program, which have largely frozen it out of the global banking system.
Iran provides 18% of Turkey's natural gas and 51% of its oil. But since U.S. and European Union sanctions ban Tehran from receiving payments in dollars or euros, Ankara pays Iran for the gas in Turkish liras. The lira is of limited value for buying goods on international markets but ideal for purchasing Turkish gold. The government hasn't specified how it pays for Iranian oil.
"In essence, gold exports [to Iran] end up like payments for our natural gas purchases," Mr. Babacan said. "Turkey is depositing the payment for the gas we purchase from Iran to Iran's account in Turkey…I don't know exactly how they then transfer it," he said.
UAE’s gold ATMs used for $7m transactions by investors, tourists
Indian household savings used to buy gold: RBI
High inflation and a penchant for gold appears to have impacted household savings behaviour, which is likely to have implications for overall investment and economic growth, says India's apex bank.
India's apex bank, the Reserve Bank of India, has once again turned the spotlight on the citizens craze for gold and, in its inimitable style, has dealt a back-handed compliment to the earning potential of gold. The bank has said there is a need to contain risks in gold prices and housing as they seem to be running way ahead of inflation.
Over the last two years, housing prices have climbed between 16% to 25%, while gold has risen at a faster pace between 14% to 40%. In its Annual Report for 2011-12, released Thursday evening, the bank has said, ``These two markets (housing and gold) have not only provided effective inflation hedges, but also enabled savers to earn good real returns amidst high inflation.''
Personally, I don’t think gold has it’s best use as a transactional currency and is better served as a wealth reserve, but this recent effort to bypass UN sanctions is more about dollar reserve status and U.S. political control. People need oil and countries can negotiate cheaper prices uses barter and gold. Sanctions will never stop this from occurring.
In the past few years, many of the BRIC countries (Brazil, Russia, India and China) have agreed to bilateral trade agreements that do not use the dollar. The addition of gold for oil deals further decreases dollar usage. In other words, this is another wound for the dollar in its battle to maintain its world currency reserve status.