Sanctions hit Iranians look to gold

Reeling under sanctions and dipping local currency, Iran has decided to pile up more gold to ensure economic stability.

Following the government, citizens also rushed to accumulate as much gold or dollar before it too late as the local currency continued to lose its charm,losing about 15 percent so far this month.

Iran’s currency, the rial, plunged to a record low against the dollar this month and dropped to a low of 15,800 per dollar on the street market, to the concern of officials.

Iran’s parliament summoned the economy minister, central bank chief and foreign ministry officials to explain the current economic situation and ways they planned to weather the sanctions.

The depreciation marked an acceleration of a long fall in the value of the rial as Western sanctions bit into Iran’s economy.

The United States and Europe are expected to impose further measures in coming weeks. Many iranians consider gold as the best option as the dollar isn’t easily available.

Reports said people are rushing to buy gold coins from banks. Iranian authorities didn’t dset any barrier to gold purchase so far but some analysts believed they were considering restrictions on retail gold purchase by citizens.

On the government level,Tehran has been one of the biggest buyers of bullion over the past decade after China, Russia and India, and is among the 20 largest holders of gold reserves.

They estimate it holds more than 300 tonnes of gold, up from 168.4 tonnes in 1996. – Bullion Street

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Posted by admin on Dec 24 2011. Filed under Gold predictions. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry