TEHERAN (AFP) - Iran's central bank said on Sunday (March 26) that it will appeal Luxembourg's decision to freeze US$1.6 billion (S$2.24 billion) of its assets, which the US is claiming as compensation for victims of the September 11, 2001 attacks.

The bank also said it would take steps to curb its remaining transactions in dollars, which it still receives particularly for oil sales.

In response to fresh US sanctions announced since last month, "Iran has sought to limit its dependence on the dollar... this policy will continue," the bank said in a statement published by state media.

A Luxembourg court last week denied Teheran's request to retrieve the US$1.6 billion frozen in the country during an earlier raft of sanctions targeting Iran's nuclear programme.

US lawyers are hoping to seize the money to pay off the families and estates of victims from the 2001 attacks, after a New York judge ruled Iran was partially responsible because it allowed Al-Qaeda members to travel through its territory.

Iran rejects the accusation and demands the return of the money, which is frozen in the Clearstream clearing house, a financial company based in Luxembourg.

A separate case is being heard in Luxembourg to decide whether the money will be released to the US.

Billions of dollars in Iranian assets were frozen in the US and Europe as part of efforts to push Teheran into a nuclear deal with world powers, which was finally signed in July 2015.

Some Iranian assets remain frozen despite the deal, in part due to ongoing compensation cases - not just for the 2001 attacks but also the bombing of a US Marines barracks in Lebanon in 1983 that killed 241 Americans.

The US Supreme Court ruled last year that US$2.1 billion frozen in a Citibank account in New York should be given to the US victims of the 1983 bombing - a verdict Iran is contesting at the International Court of Justice.