Turkey wants gold savings to shore up ailing lira

Turkey wants gold savings to shore up ailing lira

Synopsis

By Burak Akinci

Turkey wants gold savings to shore up ailing lira
Advertisement

ANKARA: Gold has a central place in Turkish customs from birth to weddings. As the country is battling economic woes and low foreign currency reserves, the authorities want to draw the yellow metal stored by citizens into the banking system.

As Turkey’s annual inflation surged to a two-decade high of 48.7 per cent in January, while the local currency lira was steeply depreciating against the U.S. dollar, the government tried to encourage citizens to bring the so-called “under the mattress” gold worth billions of dollars into the system to save the lira.

“Under the mattress” gold is a term describing the asset stored by Turkish citizens at home as a buffer against rising prices and currency devaluation. Turkey’s Treasury and Finance Minister Nureddin Nebati announced on Saturday in Istanbul, Turkey’s financial hub, a new scheme of converting households’ gold into lira.

As of next month, citizens will be easily and safely deliver their gold savings to the financial system via banks and jewelry stores, he said.

This plan aims to strengthen the lira by depositing 5,000 tons of gold into the banking system, which is equivalent to nearly 350 billion dollars.

Advertisement

Nebati said part of that amount will support the Central Bank’s foreign currency needs.

In a jewelry shop in capital city Ankara’s bustling neighborhood of Kizilay, consumers are making an inquiry as the gold price in the Turkish Lira change daily.

“Culturally, gold has a prominent influence and place in the daily life of Turks, they use it mostly as a commodity besides adornment purposes,” Ismail Yuksek, a veteran jeweler who deals in an alley full of gold jewelry stores.

During an economic storm, Turkish people put the gold “what we call under the mattress to protect their savings against price fluctuations,” Yuksek said.

In Turkey, gold is broadly considered a form of a traditional gift for weddings, births and other ceremonies. When a child is born, a gold coin is given to the family as a sign of a good omen, the dealer explained.

At weddings, giving gold coins or jewelry to the bride and groom holds an inescapable role of delivering good wishes.

Advertisement

“Gold is currently the second commodity used by Turks after money” that can be bought and sold, he added. Historically, the Turkish people have used gold as saving and investment to protect their savings from inflation. There are even gold certificates and various gold-based investment funds offered by many banks.

Advertisement
Advertisement
Read More News On

Catch all the Business News, Breaking News Event and Latest News Updates on The BOL News


Download The BOL News App to get the Daily News Update & Follow us on Google News.


End of Article
Advertisement
In The Spotlight Popular from Pakistan Entertainment
Advertisement

Next Story