Turkish central bank behind gold surge – analysis

Turkey’s gold imports, which are contributing to the widening current account deficit, are the result of the central bank replacing foreign currency with gold in its overall reserves, according to Alaatin Aktaş of the Dünya newspaper.

The central bank usually stores its gold in London, New York and other financial centres, but is now storing it in Turkey, causing an increase in the imports, Aktaş said.

The policy is the result of a request by President Recep Tayyip Erdoğan to increase the country’s gold reserves and reduce reserves of some foreign currencies, Aktaş wrote. Central bank officials, however, are keeping silent about it, he said.

Gold constituted about $2.3 billion of Turkey’s total imports of $21.5 billion in January, he said, citing government figures published this week. Gold contributed to a more than a doubling of the country’s trade deficit during the month, he said.