It is stated that the amount of physical gold held by households in Turkey outside the banking system is at the level of approximately 5 thousand tons. It is reported that the total value of this stock reaches approximately 600 billion dollars at current market prices.
Economists and industry representatives are focusing on different models to bring these savings, long defined as "under the mattress," into the financial system. The inability to include gold in credit and investment channels is cited as one of the factors limiting the efficient use of economic resources.
REASONS FOR THE TREND TOWARD PHYSICAL GOLD
According to former Central Bank of the Republic of Turkey economist Prof. Dr. Selva Demiralp, past economic crises play a significant role in citizens' preference for physical gold. Sharp fluctuations in inflation and exchange rates reinforce the view of gold as a safe haven for savers.
Gold remaining outside the financial system also keeps Turkey's need for gold imports on the agenda. According to industry representatives, the jewelry sector uses approximately 40 to 50 percent of imported gold; the sector's annual gold requirement is at the level of 170-200 tons.
Istanbul Chamber of Jewelers President Mustafa Atayık highlights two proposals for bringing gold held under the mattress into the economy. The first of these is the system called YAY-SİS, or the Under-the-Mattress Gold Investment System. In this model, the goal is for citizens' physical gold to be appraised by authorized jewelers and transferred to accounts in public banks as pure gold.
The second proposal is the establishment of a "Gold Bank" that would accelerate the conversion of scrap gold and include savings in the financial system. Atayık reported that the Banking Regulation and Supervision Agency (BDDK) is continuing its legal and technical work regarding the application for the Gold Bank.
News Source: 12punto
