Analysts said that as gold imports have dropped, Turkey's gold reserves have also declined as the central bank has moved to meet domestic demand.
Overall exports shrank 17.2% to $19.315 billion in April while imports fell 4.5% to $28.162 billion, the ministry said in a statement. Energy imports decreased 35% year-on-year to $5 billion in April, while gold imports amounted to $1.5 billion in the same period. Turkey imported $5.1 billion worth of gold in January, while gold imports decreased to $4.1 billion in February and $1.7 billion in March, the Trade Ministry data shows. The central bank's gold reserves dropped to $49.3 billion as of April 20 from a peak of $53.4 billion at the end of March. "The accelerating drop in the Turkish central bank's gold reserves over the past month is being attributed to increased public demand for the metal as a hedge in a high-inflation environment," Tatha Ghose, FX analyst at Commerzbank, said. "Since imports of gold were banned in February to help protect the current-account from going deeper into the red, (the) bank has to sell gold from its own reserves to meet this demand," he added.
Turkey previously suspended some gold imports to ease
the economic impact of the earthquakes in February. Bankers say,
despite the import restrictions, increasing domestic gold demand
was met by the central bank reserves.
(Reporting by Daren Butler and Nevzat Devranoglu;
Writing by Huseyin Hayatsever;
Editing by Ece Toksabay and Christina Fincher)
