Gold News

Iran Arrests Gold Coin Dealers in Bid to Support Rial

POLICE in the Iranian capital of Tehran closed the city's open currency market and arrested up to 100 people at the weekend, including Gold Coin dealers according to local reports.
Saturday's raids on the shops and dealers in central Tehran's Jomhuri and Ferdowsi streets saw 30 currency traders detained, state officials said, closing the entire market save for a handful operating under a central-bank license.
"They are bringing down the [Dollar] rate by force," the Financial Times' correspondent quotes one employee at a currency shop now closed down. He put the total number of arrests at "more than 100.
"They confiscated all our banking cheques and assets in the shop."
The authorities said they also seized large quantities of Gold Coins. Last week the Central Bank of Iran opened its own foreign-currency outlets, offering to undercut the informal market by 2%.
This weekend's close-down came after the Rial lost 30% of its US Dollar value last week alone, taking the total drop to almost two-thirds so far in 2012 – caused, analysts say, by a shortage of foreign currency inside Iran following international sanctions aimed at deterring the ruling Revolutionary Council from developing nuclear weapons.
Police have since been patrolling Tehran's open currency market, where unofficial exchange rates had hit 30,000 Rials per Dollar, some 6% above the government's published rate. But currency traders also continue to walk the street, reports the FT, inviting passers-by to swap Rials for foreign money.
With consumer-price inflation already running well above 25% per year, last week brought marches and strikes across Iran by traders and shopkeepers protesting at the Rial's plunge. Police fired teargas on Thursday to disperse a crowd of some 200 people near the Ferdowsi currency market, according to Bloomberg.
Previously the major supplier of Gold Coins to private citizens, the Central Bank of Iran was forced to suspend its direct sales in December 2011 due to a surge in demand and shortage of stock.
Gold Coin and other bullion imports from neighboring Turkey leapt to $6.2 billion between Jan. and July from just $22 million in the same period last year.
"Iranians have made some very big purchases recently," says one Dubai Gold Dealer quoted by Bloomberg, suggesting that ex-pat Iranians are sending Gold Coins home to help their families weather the crisis.
"Iranians have always been good customers. It's just that we’ve seen more sales."

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