Iran says unblocked S.Korea funds to be used for 'non-sanctioned goods'

(Reuters) - Iran's central bank chief said on Saturday that all of Iran's frozen funds in South Korea had been unblocked and would be used for "non-sanctioned goods".

Mohammad Reza Farzin's post on social media appeared to confirm comments a day earlier by Washington, which said there would be restrictions on what Iran could do with any funds unfrozen under an emerging deal that has led to the release of five Americans from prison to house arrest in Tehran.

White House spokesperson John Kirby said Iran could only access the funds "to buy food, medicine, medical equipment that would not have a dual military use." An estimated $6 billion in Iranian assets have been held in South Korea.

The five Americans will be allowed to leave Iran once the funds are unfrozen, a source familiar with the matter told Reuters.

Farzin wrote in a post on messaging platform X, formerly known as Twitter, that the funds would be transferred to six Iranian banks in Qatar.

"Congratulations to the foreign exchange diplomacy team for successfully releasing seized foreign currency resources," he said in the post.

He added that the costs of converting the funds from South Korea's won currency to euros would be accepted by the "third country" where the money would be deposited to buy "non-sanctioned goods".

(Reporting by Dubai newsroom; Editing by Helen Popper)