TEHRAN, June 6, (Agencies): Iran’s central bank chief has denied reports the bank was converting 45 billion euros of its foreign exchange reserves into dollars and gold ingots, the economic daily Pool said on Sunday.
“These reports are incorrect. I categorically deny reports appearing in foreign media,” the newspaper quoted Central Bank Governor Mahmoud Bahmani as saying.
Iran’s English language Press TV channel’s website reported on Wednesday that the bank was converting 45 billion euros of its reserves into dollars and gold ingots.
The report, also widely carried by Iranian newspapers, said the bank’s new monetary policy came against a backdrop of a new phase of economic recession in Greece and Spain which had caused a drop in the value of euro against the dollar in global markets.
The Iranian bank had earlier replaced a substantial part of its dollar reserves into euros following the financial crisis in the United States two years ago, the website said.
“Such reports are sheer lies and I strongly deny reports on Iran planning to convert 45 billion euros of its reserves to dollars and gold,” Bahmani said.
On Wednesday, Iran’s English language Press TV quoted a report in Jam-e Jam newspaper in which unnamed “reliable sources” said the decision had been taken in reaction to the euro zone crisis.
But Bahmani blamed foreign media for publishing false reports. Iran’s central bank officials declined to comment on Wednesday.
Following the report, the euro eased slightly versus the dollar from around $1.2227 to $1.2213.
The switch announcement was seen as a policy reversal for Tehran, which for many years has shunned the dollar as part of its opposition to its arch foe, the United States.
At a 2007 OPEC summit, Iran — the world’s fifth-largest oil exporter — suggested oil should be priced in a basket of currencies rather than dollars, but it failed to win over other member states except Venezuela.
Iranian President Mahmoud Ahmadinejad has repeatedly said that the dollar was a “worthless piece of paper”.
At recently as last November, Governor Bahmani said Iran’s then policy of moving away from the dollar, both in its reserves and in the currency it received for its oil exports, had been beneficial.
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TEHRAN: Iran’s inflation rate dropped to 9.9 percent year-on-year in May, down from 10.3 percent the previous month, central bank figures published on Sunday said.
“The inflation rate in the 12 months ending in the month of Ordibehesht dropped to 9.9 percent,” Central Bank Governor Mahmoud Bahmani was quoted as saying in the daily Resalat. The Iranian month of Ordibehesht ended May 19.
The official yearly rate in the world’s fifth-largest oil exporter — facing more United Nations sanctions over its uranium enrichment programme — stood at a peak of nearly 30 percent in late 2008.
The rate for the month ending April 20 was 10.3 percent.
Easing inflationary pressures could help President Mahmoud Ahmadinejad, re-elected for a second four-year term last year in a disputed vote, to counter criticism over enforcing a subsidy reform plan that might stoke price rises and hurt the poor.
In March, parliament passed a state budget for the Iranian year, which started on March 21, that did not contain the radical reductions in subsidies sought by Ahmadinejad. Under the plan, food and energy subsidies would be phased out over five years.
Removing subsidies could make Iran less vulnerable to any possible Western sanctions over its disputed nuclear programme, but critics of the plan fear it would raise inflation. Critics have accused Ahmadinejad of fuelling inflation with profligate spending of petrodollars since 2005, when he first came to office, pledging to share out Iran’s oil wealth more fairly.
The government blames inflation on international energy and food price rises that peaked during 2008 and points to a falling trend since late last year.
Economists say that decline is due to a slowing economy as a result of lower crude prices over the last year and the global economic downturn and also monetary tightening by the central bank.
