Turkey aims at 5,000 tons of gold savings: Minister

LONDON

Turkey aims to attract nearly 5,000 tons of under-the-mattress gold into the financial system, Treasury and Finance Minister Nureddin Nebati said at a press conference in London on Feb. 8.

“With this package, we will put under-the-mattress gold, which is estimated at around 5,000 tons, into the [banking] system. It is equivalent to about $250-$350 billion. A certain part of that amount will support the Central Bank’s foreign currency needs,” he said.

The term refers to a long-held tradition of turning to gold to safeguard wealth and storing it at home.
“The most important point is that another instrument to encourage Turkish Lira savings has been prepared as an essential aspect of our model,” he added.
The government will announce a new scheme within days to get households to convert holdings of gold into Turkish Lira bank accounts, according to his remarks.

On his first trip abroad after he was appointed on Dec. 2, 2021, Nebati held talks with 18 asset management companies, 19 international development and investment banks, and over 10 private equity, infrastructure, venture capital fund and technology firms in the British capital.
During the talks, Nebati underlined Turkey’s dynamic production capacity, strong growth performance, healthy public finance, firm banking sector and low debt, according to a statement.
At a press conference held at the Turkish Embassy in London, he said that the inflation in the country, which hit 48.7 percent last month, is temporary.
On the newly introduced FX-protected Turkish Lira deposits scheme, he said the tools aiming to shore up lira’s value should not be viewed as single-use.
“We started with individuals, we added legal entities. The Central Bank also allowed Turkish citizens living abroad to benefit from this instrument.”

“The amount we received here exceeded 312 billion liras [$23 billion],” he said.
The Treasury and the Central Bank jointly introduced the scheme to protect lira-denominated time deposit accounts against any losses caused by FX fluctuations.
Speaking after a cabinet meeting on Jan. 31, President Recep Tayyip Erdoğan unveiled new schemes to be provided under the Credit Guarantee Fund to support firms. One of the schemes will support investments by companies that focus on the production of high value-added products, while another scheme will support companies’ export activities, he said.
“We aim to create an economic environment which bolsters investment, employment, production, exports and current account surplus,” Erdoğan said.

In a bid to support the currency, the Treasury and the Central Bank have jointly launched a program that encourages people to keep their savings in lira through guarantees against FX fluctuations. The lira/dollar exchange rate has recovered from its record level around 18.4 last month to 13.5 since then.
The government’s measures, announced on Dec. 20, 2021, helped to stabilize the lira at around 13.3 to 13.5 to the dollar so far this year.