Iran says not planning to move its money to Asia

Reuters:

Iran, which has said it is shifting its money out European accounts as the threat of U.N. sanctions mounts, will not move its currency assets to Asia, a deputy central bank governor said on Saturday.

Tehran has bitter memories of its U.S. assets being frozen shortly after the 1979 Islamic revolution and many foreign and domestic media speculated that Iran was eying accounts in Malaysia, Shanghai, Singapore and Hong Kong.

"Iran at the moment has no plan to transfer its currency accounts to those countries," Mohammad Jafar Mojarrad told the official IRNA news agency, when asked about the reports on Tehran shifting its holdings east.

The Central Bank of Iran confirmed to Reuters that his remarks were a correct representation of policy but declined to comment further. READ MORE

Several economists have speculated Iran could prefer to move its assets to Gulf and other Islamic accounts.

Iran faces referral to the U.N. Security Council for possible sanctions after failing to allay the world's suspicions it is seeking atomic weapons. Iran says it needs atomic power only for generating electricity.

Central Bank Governor Ebrahim Sheibani said on Wednesday that Iran would repatriate its assets held abroad should that prove to necessary.

It is unclear how much of Iran's copious oil wealth is kept in foreign accounts. The Naftiran Intertrade Company (NICO), the trade and financing arm of the state oil company, is based in Switzerland.

Economists estimate Iran will have earned more than $40 billion in oil earnings by the end of the 12 months to March 2006. Of this, $16 billion goes straight to budgeted government spending.

The rest goes to the Central Bank of Iran which keeps an unknown amount of holdings in foreign accounts.