Turkey’s gold imports of just over 39,000 kilograms in September 2022 are more than 16 times the amount that entered the country in September 2021. The increase in Turkey’s gold imports is reportedly due to increased demand for the precious metal by individuals and entities that use it in foreign currency transactions.
‘Gold instead of Turkish lira’
According to data from the Borsa Istanbul Diamond and Precious Metals Markets, the amount of gold imported into Turkey, affected by inflation, in September 2022 was more than 1,700% more than the amount brought into the country during the same period from last year.
The country’s September loot of 39,000 kilograms (kg) brings the total amount of the precious metal imported by the Turks in 2022 to 140,126 kg. As noted in a report published by the Hurriyet Daily News, Turkey’s January 2010 import figure of 44,210 kg remains the country’s largest.
Explaining why Turkey is experiencing an increase in the amount of gold entering the country, Tuna Çetinkaya, deputy general manager of Info Investment, reportedly linked the increased demand to identity requirements to purchase foreign currency. He said:
This regulation led to individuals or entities with large FX [foreign exchange] demand to use gold instead of Turkish lira in foreign currency transactions.
The depreciation of the lira
Since January 2020, when its official exchange rate stood at just under 5.50 lira per dollar, the Turkish currency has depreciated by more than 300%. At the time of writing, one dollar buys 18.58 lira. The depreciation of the currency, together with the increase in the rate of inflation, which stood at 83.45% in September 2022, is forcing the Turks to demand alternative stores of value.
In addition to gold, the Turks also imported large quantities of silver during the same period: just over 68,000 kg. The latest figure is almost double the 36,417 kg imported in September 2021. In addition to demanding precious metals, the Turks also use digital currencies such as bitcoin and the tether stablecoin.
As Bitcoin.com News recently reported, Turkey hosts the largest cryptocurrency market in the Middle East and North Africa (MENA) region.
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