Aysen Esen, CEO of Istanbul Gold Refinery, expects a further emphasis on drawing private gold holdings estimated at $100-200 billion.
The initiative encourages people with an estimated 2,500-5,000 tons of gold "under the pillow" to store their precious metals in the Turkish banking system.
People in Turkey, like those in many other Middle Eastern countries such as in Iraq, have long turned to gold to protect their wealth. This helps them to keep their life savings at home where it is at their disposal.
The move is an attempt to reduce the need for foreign borrowing, explained Esen.
In October, Turkey's treasury sold gold-backed bonds and sukuk [Islamic bonds] on international markets. Lender Denizbank said Turkey would again float the bonds in December.
“Turkey’s 11 banks collected nearly 60 tons of gold last year. They collected nearly 75 tons of gold this year when the gold issuance of the Turkish Treasury is added,” said Esen.
She predicted that gold exports "would surge" in 2018, in contrast to this year's jump in imports, according to Reuters, but did not provide an explanation.
Al-Monitor wrote in May that Turkey has increased export and import of gold bars with the United Arab Emirates.
Turkey had exported $6.1 billion of gold and imported $14 billion this year by October.
According to the global currency tracker exchange-rates.org, the value of the Turkish lira has decreased compared to the US dollar since the failed Turkish military coup of 2016.
In June 2016, $1 was worth 2.95 Turkish Lira; as of Friday, 1 USD was worth 3.81 Turkish liras — a 29-percent fall.
