Turkish banks selling off gold reserves
- Published: Sep 18, 2018, 4 PM
As the strength of the Turkish lira continues its downward spiral, commercial banks and other financial lenders are liquidating portions of their gold reserves to stave off financial disaster.
Over the past three months alone, according to Kitco News, the commercial lenders have cashed in a reported $4.5 billion in U.S. dollars worth of gold.
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Since the beginning of calendar year 2018, the value of the Turkish lira against the U.S. dollar has dropped nearly 40 percent.
Bloomberg News reports the Central Bank of Turkey’s weekly gold holdings slipped 20 percent since the middle of June until now to 15.5 million ounces. The drop came on the heels of the Central Bank of Turkey’s decision to lower reserve requirements for banks by 4 percentage points for foreign exchange liabilities over two and three years, and by 2.5 percentage points over other maturities.
“With this revision, approximately 10 billion Turkish lira, 6 billion US dollars, and 3 billion US dollars equivalent of gold liquidity will be provided to the financial system,” according to the central bank.
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