TEHRAN: Iran increased its foreign currency reserves by $9 billion by selling sold gold and through foreign exchange transactions, its central bank chief said on Monday, state broadcaster IRIB reported. Mahmoud Bahmani did not disclose the total amount of Iran's reserves, nor did he specify how much gold was sold or over what time period. "The country's foreign exchange reserves have been increased by $9 billion through selling gold and foreign exchange conversion," IRIB reported him as saying at a breakfast meeting at Tehran's chamber of commerce. Earlier this month Bahmani denied a newspaper report that the central bank was selling €45 billion from reserves to buy dollars and gold. That would have marked a reversal of Iran's policy of moving away from the dollar, both in its reserves and in the currency it receives for its oil exports. Bahmani called the report "sheer lies". Iran also does not usually disclose the value of its reserves, though state television reported last December they exceeded $80 billion. On inflation, Bahmani said government plans to start phasing out subsidies for staple items like food and fuel from September would have an impact. In May the official inflation rate dropped to 9.9 percent. "If it were not for the subsidy reform issue, we planned to drop the inflation rate to below 7 percent by the end of summer and to 4-5 percent by next year," he said. He did not give an estimate for the inflationary impact of the subsidy reform which analysts say could mean big price rises for key goods — something which could pose a major political problem for President Mahmoud Ahmadinejad.
