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Turkey's gold imports plummet by 93 percent

Staff writer |
A drop in Iran-sourced demand and a rise in gold prices caused Turkey to slash its gold imports by 93% last month compared to February of the previous year.

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The amount of imported gold was 1.27 tons in February, marking a fall of 93 percent from the same month last year and 79 percent from January, according to Borsa Istanbul data. Turkey had imported six tons of gold in January and 17.34 tons in February 2013.

Turkey's gold imports last year skyrocketed by 150 percent to reach a record level of 302.3 tons totaling $16 billion, as Ankara continued paying for Iranian natural gas and oil imports using the Turkish Lira and as Tehran used deposits held in Turkey's state-run Halkbank to buy gold.

Some of the gold was held inside Turkey at the peak of the trade while some was taken to Dubai by couriers to be sold for foreign currency, which was urgently needed by Iran as sanctions against its atomic program have increasingly cut off access.

Investors sold off emerging market assets in the expectation that the U.S. Federal Reserve would continue to gradually to reduce its stimulus program.

The lira was among the biggest losers, particularly vulnerable because of Turkey's large current account deficit and political uncertainty surrounding a corruption scandal. For the past 10 days, gold prices have been facing a steeper jump as demand for safe assets boosted on easing fears of imminent military action by Russia in Ukraine.

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