Türkiye announced a 20% additional charge for some gold imports Tuesday, as part of efforts to rein in the negative impact on the current account balance.
The decision, published in the Official Gazette, marks the latest in a series of measures the government has been after to address the adverse effects of the increase in gold imports on foreign trade and the balance of payments.
Reports on Monday said Türkiye was planning to impose a quota on the imports of unprocessed gold to relieve the current account deficit, boost foreign exchange reserve and encourage domestic production and exports.
The decision on Tuesday said that gold imports originating from countries without a free trade agreement and that are not in the European Union will be charged an additional fee on top of existing import and other duties.
The gold imports that will be charged the extra fee as part of the decision include gold jewelry products and parts, and some base metal products plated with precious metals.
Türkiye’s current account deficit widened mainly due to high gold and energy imports and stood at $37.7 billion in the first five months of the year, widening some 44% when compared to the same period last year.
Reports on Monday said legislative work on the gold quota would be completed soon by the Treasury and Finance Ministry and the Trade Ministry and that the quotas will apply to unprocessed gold imports carried out by precious metals brokers who are members of Borsa Istanbul Stock Exchange (BIST).
Imports of unprocessed gold in the first seven months of the year increased by 180% from the same period a year earlier to $19.4 billion, Trade Ministry data shows.
After February's devastating earthquakes, restrictions were imposed on gold imports. But domestic demand for gold nonetheless became stronger, with negative returns on the Turkish lira being the main factor boosting demand.
Monthly quotas will be set taking into account the number of unprocessed gold imports carried out by brokers in previous years, Anadolu Agency (AA) said.
Imports made for subsequent export will be excluded from the quota application in order to encourage gold production and exports, it added.
Central bank gold reserves have decreased by some $12 billion from their peak of $53.36 billion in end-March.
