Iran sees enemies behind forex, gold price hikes

Wed Oct 5, 2011 3:03pm GMT
 

* Ahmadinejad says external, internal foes manipulating markets

* Analysts say gold, dollar price spikes linked to inflation fears

* Huge subsidy cuts have pushed up prices of food and fuel

TEHRAN, Oct 5 (Reuters) - President Mahmoud Ahmadinejad said on Wednesday Iran's enemies were deliberately causing the price of gold and foreign exchange to rise in a bid to undermine the Islamic Republic's economy.

"The enemies and ill-wishers want to make a fuss and present wrong information to provoke and deviate the market," Ahmadinejad told a crowd in a town in the western province of Hamadan, where he was on one of his frequent provincial visits.

"In order to disturb the market they buy a lot of gold coins with their huge amount of money ... they do the same in the foreign exchange market. But we have got enough reserves to meet all the country's needs," he said in the speech, broadcast live on state television.

The price of gold coins and foreign currency has risen sharply in recent months, a fact economists put down above all to fears that rising inflation is sapping the buying power of the Iranian currency, the rial.

A reduction in interest rates paid on bank savings has also prompted Iranians to withdraw their cash and place it elsewhere, while a new tax on gold coins has led many to favour foreign currencies over their traditional safe haven, gold.

International sanctions have made it harder to transfer funds abroad -- once a popular way for wealthier citizens to squirrel away cash.   Continued...

  • Africa
  • US
  • Europe
  • Asia
UK £ USD =1.2617
Euro USD =1.1124
Rand USD =0.0764