Iran resumes gold trade with Turkey

Iran’s President Hassan Rouhani.

Turkey, a neighbour and long-term business partner of Iran, will resume trading gold with Tehran as soon as the economic sanctions imposed by world powers ease. The decision follows Sunday’s deal between the Middle Eastern country and permanent members of the United Nation Security Council, including Germany.

Gold trade between the two nations blossomed last year when Iran began using Turkish payments for energy to import gold, bypassing this way U.S. sanctions imposed due its nuclear program.

“Because of problems in money transfers in 2012, the gold trade rose. I don’t think that we are still in the same situation that would require us to trade in gold in those amounts,” said Iran’s ambassador to Turkey, Ali Reza Bigdeli, according to Reuters.

Analysts agree the restart of gold trading between the two nations will significantly benefit Turkey’s glum economy, as it would also boots other goods imports, especially oil.

Since Turkey buys Iranian oil with Turkish lira rather than dollars, an increase in oil imports from Tehran would relieve pressure on the Turkish currency, sources told Iranian oil, which is cheaper than alternative sources, could also help reduce Turkey’s large current account deficit, often identified as its biggest economic weak spot.

Turkey currently exports over 20,000 products to Iran, including gold, gold-plated silver, iron, steel, textile yarn, fabrics, land transportation vehicles, electrical machinery and appliances. Iran mostly sells it oil and gas.

Images by Asia Society, via Flickr and Wikimedia Commons.

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