Turkish banks to be able to make Iran transactions, says Economy Minister

ISTANBUL - Reuters

Economy Minister Zafer Çağlayan delivers a speech at a meeting in Istanbul. AA photo

All Turkish banks will be able to make Iranian transactions as sanctions on Iran are eased in the wake of a deal between Tehran and six world powers to curb Tehran's nuclear programme, Turkey's economy minister said on Thursday.

The agreement eased some sanctions on trade with Iran that have slashed the OPEC member's exports by more than half and cost it as much as $80 billion in lost oil sales since the beginning of 2012, according to White House estimates.

State-owned Halkbank, one of Turkey's biggest banks, had continued to process transactions, remaining one of the few to do so in the face of U.S. sanctions targeting financial institutions that dealt with Iran's central bank.

"Because of the pressure exerted by the United States, private banks were unable to process (Iranian) transactions. Now that obstacle has been removed, not only Halkbank but other banks will be able to process payments," Economy Minister Zafer Çağlayan told reporters in Istanbul.

His comments are the first confirmation from Turkey about how it sees the deal affecting its banks.

A U.S. fact sheet about Sunday's agreement said the six powers would provide "limited, temporary, targeted and reversible" sanctions relief in return for the nuclear curbs agreed by Iran. But, it added, the bulk of sanctions would be maintained, including the oil, finance, and banking sanctions "architecture".

Among transactions conducted by Halkbank are payments by Indian refiners to Iran. The refiners used this route until February and these payments could now resume.

The United States tightened the noose on Iran's biggest revenue stream in February by asking its oil buyers to stop transferring payments to Tehran and instead keep the money in bank accounts in the currency of the importing country.

India could step up crude imports from Iran next month and start transferring billions of dollars it owes for oil as early as next week.