Turkey cuts gold holdings in January: IMF data

ISTANBUL - Reuters

Turkey’s bullionholdings dropped 6percent to 488.578 tons, preliminary International Monetary Fund (IMF) data has shown.

Turkey slashed its gold holdings by 31.171 tons in January, representing the steepest decline in a list of countries’ gold reserves compiled by the International Monetary Fund, data showed.

Turkey cut its bullion holdings by 6 percent to 488.578 tons, preliminary IMF data showed on Feb. 25.
The drop followed a series of increases in the country’s holdings last year after the Turkish Central Bank allowed commercial banks to hold a portion of their reserves in gold.

The Central Bank raised the proportion of reserves that can be held in the form of gold from zero to 10 percent in September 2011, to 20 percent in March 2012 and 25 percent again in June 2012.

Trade drop

However, the steep rise in the U.S. dollar and the remarkable weakening of the Turkish lira that made the gold more expensive.

Istanbul Gold Exchange data that was released on Feb. 7 had showed a sharp fall in the Turkish lira and rising world gold prices curbed Turkey’s demand for gold in January, slashing monthly bullion imports by more than 80 percent.

Turkey imported only 6 tons of gold bullion in January, a 47 percent drop compared with the same month last year and an 81 percent plunge from December’s 31.65 tons, according to data.

Turkey is the world’s 12th largest holder of gold as part of the central bank’s reserves, according to the World Gold Council (WGC), which represents producers.

Gold has become the main subject of “money laundering” claims since recognizing Turkey’s bullion gold trade’s boom since 2011.

As a way to bypass Western sanctions on Iran, Turkey has been paying for Iranian natural gas and oil imports with gold, trigeering the country’s gold appetite in recent years.

The IMF said the euro area increased its gold holdings by 7.776 tons to 10,787.434 tons in January. Gold reserves by Germany, the world’s second-largest holder, were unchanged at 3,387.247 tons while top-ranked United States also held steady at 8,133.715 tons.

Greek Cyprus stops gold sale

Gold holdings by central banks are closely watched since the group became net buyers in 2010 after two decades as net sellers. The 2008 global economic crisis triggered a wave of official-sector interest in gold.

Official-sector buying reached a 48-year high in 2012 at 544.1 tons, WGC data showed, but dropped to a three-year low of 368.6 tons last year, driven in part by the volatility in prices.

Greek Cyprus, which holds 13.87 tons of gold, said in December it has no plan to sell gold reserves to fund its 10 billion euro ($13.7 billion) bailout.

That came months after it looked into unloading its bullion reserves to ease its financial burden which sent spot prices sliding by the most in three decades.

Spot gold was trading near a four-month high at $1,333.51 an ounce, underpinned by worries over the global economy including in China where reforms are underway to shift to a more consumption-led growth.