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(Kitco News) Turkey’s central bank is offloading its gold reserves to help meet high domestic demand after curbing precious metals imports in February, Bloomberg reported.
Turkey has seen a surge in gold demand in the past year as citizens embraced the precious metal as a hedge against inflation, which ran at a pace of over 85% at one point last year, and local currency devaluation.
The central bank's data showed that gold reserves fell 9% in the last seven weeks.
Turkey also sold 15 tonnes of gold in March, the World Gold Council reported. This marked the first monthly net sale since November 2021 and lowered the country's reserves to 572 tonnes.
Turkey's gold consumption saw a huge jump last year, with the country's central bank being the top gold buyer.
Turkey's official gold reserves rose by 148 tonnes to 542 tonnes last year, marking the highest level on record for Turkey, according to the World Gold Council data.
On top of that, Turkey's gold imports from Switzerland hit the highest level on record in January, totaling 58.3 tonnes worth $3.6 billion.
In February, Turkey introduced steps to curb surging gold imports.
The cut was due to growing gold imports directly contributing to the Turkish current account deficit, which remained significantly negative in February, coming in at $8.78 billion. In January, Turkey saw a record deficit of $10 billion.
This has been a concern for Turkish President Recep Tayyip Erdogan, who is gearing up for next month's elections.
The plan to curb imports is working, with the latest Swiss customs data from March showing that exports to Turkey fell to 10,748 kg. This was a dramatic shift after 43,217 kg was imported from Switzerland in February.
