* Iran avoids "serious dent" to economy from sanctions
* Iran gold reserves 12 times larger than 5 yrs ago
* Iran inflation at 20 pct, no need to raise rates
* Cenbank gov says does not want to see higher oil prices
ISLAMABAD, Nov 21 (Reuters) - Iran has avoided a "serious
dent" to its economy from Western sanctions thanks to large gold
reserves, high oil prices and reduced foreign imports, its
central bank governor told Reuters on Wednesday.
Gold reserves were enough to last 15 years, Mahmoud Bahmani
He added that inflation was running at 20 percent but that
there was no need to raise interest rates.
Western nations have imposed their toughest sanctions to
date against Iran in an attempt to halt its disputed nuclear
programme, causing the rial to plummet, inflation to jump and
hundreds of thousands of Iranians to lose jobs.
"We can't say that sanctions did not damage us. They did,
but we thrashed out plans to control the damage and were able to
avoid a serious dent to our economy," the central bank chief
said in a rare interview.
He was speaking on the sidelines of a summit of developing
nations in Islamabad.
Despite the economic impact from the sanctions, Iran has not
backed down from its nuclear programme and there were signs
Tehran could be building up its capacity even further. That has
sparked growing concerns in Israel, which has threatened to bomb
Officials from six world powers -- Britain, China, France,
Germany, Russia and the United States -- were meeting in
Brussels on Wednesday to plan for a possible new round of talks
with Iran, the latest effort to resolve a decade-long standoff.
Iran denies international accusations it is seeking nuclear
weapons and has so far refused to meet demands to scale back its
atomic activity, insisting on immediate relief from sanctions.
GOOD AS GOLD
To help protect its economy, Iran has built up its gold
reserves over the last few years with its current holdings 12
times larger than five years ago, Bahmani said. He declined to
give a specific amount since the government does not disclose
"We believe that these reserves are enough for us for the
next 15 years, even if we don't import foreign gold," he said
through a translator.
The country's official reserves, which include foreign
currencies and gold, totalled $106 billion at the end of last
year, according to the International Monetary Fund.
Some analysts believe the official reserves may have shrunk
by several tens of billions of dollars this year because of
In October, Iran prohibited gold exports without central
bank approval, in an effort by the government to restrict
outflows of wealth. The government also banned the export of
about 50 basic goods, including wheat, flour, sugar and red
meats, as well as aluminium and steel ingots.
Bahmani refused to speak about Iran's foreign exchange
He added that Iran does not use its gold reserves as a
bartering tool in exchange for foreign goods, despite sanctions
that bar Tehran from using U.S. dollars and euros in financial
The sanctions have slashed Iran's oil export earnings and
triggered a rush by Iranians to change their savings into
foreign currency, dragging the rial down by two-thirds in 15
months and boosting inflation.
Inflation in Iran was running at around 20 percent, Bahmani
"It's a temporary high rate of inflation in Iran and we are
trying our best to control the level and bring it down to its
real value in the near future," he said, adding he did not see a
reason to raise interest rates.
High oil prices have helped limit the drop in revenue from
lower crude exports. Bahmani said Iran did not want to see oil
prices to rise further because of its potential impact on the
Brent crude traded up more than a dollar on
Wednesday to above $111 a barrel, supported by clashes between
Gaza and Israel.
(Additional reporting by Jan Harvey in London; Editing by
Michael Georgy. Editing by Jeremy Gaunt.)