Syria discounting gold as sanctions bite

2012-04-18 21:21

Paris/Dubai - Syria is trying to sell gold reserves to raise revenue as Western and Arab sanctions targeting its central bank and oil exports begin to bite, diplomats and traders said.

Western sanctions have halved Syria's foreign exchange reserves from about $17bn, French Foreign Minister Alain Juppe said on Tuesday after a meeting with about 60 nations aimed at co-ordinating measures against President Bashar al-Assad's government.

"Syria is selling its gold at rock bottom prices," said a Western diplomatic source, declining to say where it was being sold.

A second diplomatic source confirmed the information, adding that Damascus was looking to offload everything it could to raise cash, including currency reserves.

On February 27, the European Union agreed more sanctions including prohibiting trade in gold and other precious metals with Syrian state institutions, including the central bank.

Two gold traders in the United Arab Emirates said the Syrian government had been offering gold at a discount, with one saying it was making offers at about 15% below the market price.

The trader said Damascus was selling small volumes of around 20-30kg which were easier to offload, with offers being made through private accounts set up with free e-mail providers.

Another trader said deals as of yet had not gone through in Dubai because the Emirati authorities were blocking unauthorised trades and few potential buyers were willing to take the risk of these deals.

"We have been getting offers for gold purchases from Syria and North African countries at 15% discount, but there are tough restrictions in Dubai that don't allow any unauthorised trades," said the trader.

Tighten sanctions

The meeting on Tuesday was aimed in part at tightening up existing sanctions and trying to pinpoint countries that were offering Damascus ways to sidestep them.

The World Gold Council estimates Syria had about 25.8 metric tons of gold as of February 2012, representing about 7.1% of its total reserves.

At Wednesday's spot prices, Syria's total gold reserves are worth around $1.36bn. Around $33.8bn worth of gold is cleared through London on a daily basis.

Syria has not published economic statistics since May 2011, making it impossible to verify gold figures or forex reserves.

Spot gold inched up 0.2% to $1 652.84 per ounce on Wednesday, after touching a one-week low near $1 634 in the previous session.

Diplomatic sources estimated the sanctions had cut Syria's oil output by 30%, costing Assad's government $400m a month in revenue, or $2bn since November. Prior to EU sanctions, Damascus sold 90% of its oil to Europe.

The Syrian pound hit a record low on the black market in March of around 100 to the dollar, compared to 47 before the protests erupted, sharply raising the cost of imports.

Diplomats said that sort of economic difficulty would over time increase the pressure on Assad's government.

"Sanctions are a particularly effective instrument to deprive the Syrian regime of the resources it uses to finance and arm militias," Juppe said on Tuesday.

  • Fred - 2012-04-18 21:57

    It's too slow for the families and lives Assad is destroying. Jupe and the other leaders of the freer world, you're guilty of a dereliction of responsibility and of being weak.

      nowicki1 - 2012-04-18 23:19

      You still calling it the freer world. haha

      Fred - 2012-04-18 23:43

      What are you comparing it to Nowicki?

  • nowicki1 - 2012-04-18 23:18

      Fred - 2012-04-19 04:01

      Are you serious in posting this Nowicki? It's completely staged. It's in a flat somewhere, the interviewer's some nutty professor type, and the guy's reading a scripted response. What are you thinking man?

      nowicki1 - 2012-04-19 18:51

      In a flat somewhere, hmm that sounds suspicious, people usually Skype at the beach..

  • nowicki1 - 2012-04-18 23:28 - Be very careful about who takes Assad's place

      Fred - 2012-04-18 23:46

      There's a violent tyrant in power who is using the Syrian people's money and army to destroy them and their cities, while handing out fruit baskets. The Syrian people in general election will decide who their administration and leadership will be. The maps have been made. We South Africans were part of creating them.

      AnthonyfromAfrica - 2012-04-19 04:56

      ""Be very careful about who takes Assad's place"" The same scare technique were used in Tunesia, Egypt and Libya. And today, notwithstanding the difficulties of rebuilding their countries after 40 plus years of tyranny, one will not find more than a few thousand, who would like to go back to the " good old days "" !!!

      nowicki1 - 2012-04-19 18:56

  • Fred - 2012-04-19 07:09

    The story should read, "Assad is trying to sell Syria's gold". It doesn't belong to him, yet he's behaving as if it does. And he's using it to finance the destruction of Syrians and the country.

  • Nasser - 2012-04-19 07:43

    2 Countries stand to gain the most from Assad & Syria's demise, namely the USA's closest allies in the region, Saudi Arabia & Israel. The Syrian people will be the biggest losers like the people of Iraq, Afghanistan and Libya. The US & European response to the Syrian situation has little to do with a desire to protect Syrian people. It has everything to do with wanting to promote a geopolitical agenda and the hegemony of despotic regimes who serve US & European economic interests. While the grand mufti in Saudi is calling for the destruction of churches in the Arabian Peninsula, Hillary Clinton is in Riyadh hob nobbing with the wahabbi monarch and not a word is mentioned of Saudi's atrocious human rights record. Why, because Saudi as the world's biggest oil supplier gaurantees the US, the world's biggest oil consumer with a consistent supply of oil and military contracts! So Fred, your mantra about "free world leaders dereliction of duty" is either naive or wilfull BS. Maybe you can fool some of the people some of the time, but you can't fool me!

      Fred - 2012-04-19 13:04

      All the while that you continue to blind yourself with your anti-US and Israel OCD, Muslim families are being slaughtered, and Muslim cities destroyed RIGHT NOW. Clearly you couldn't care less about the tens of thousands of Syrians being butchered, detained, tortured and raped, and the Syrians cities being destroyed. Sad, but consistent. Too many Muslims are willing to subject their people to this sort of abuse. It's hard to understand in 2012.

      AnthonyfromAfrica - 2012-04-19 19:21

      Nasser, You might just have a better understanding of what has been happening in N Africa and in Syria, if you would give those countries citizens some credit, especially those brave, who gave their lives, so that their childen would not have to be terrorized by those tyrtants/dictators!!!

      nowicki1 - 2012-04-19 20:31

      Ignore the sock puppets Nasser. They think emotively instead of logically and fail to see the bigger picture. Their broad statements are laughable such as "Too many Muslims are willing to subject their people to this sort of abuse" and, "Clearly you couldn't care less about the tens of thousands of Syrians being butchered". They are obviously very naive to the topic but their arrogance shines through with every comment.

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