Central Bank to purchase gold in TL from domestic resources
An additional move came after Deputy Prime Minister Mehmet Şimşek announced over the weekend that they will add two new secure investment tools to the financial system; namely, gold-denominated bonds (sovereign gold bonds) and lease certificates (sukuk) denominated in gold to bring under-the-mattress gold into the economy. Instead of importing gold, the Central Bank of the Republic of Turkey (CBRT) will buy gold from domestic reserves in the Turkish lira.
According to Habertürk's report, it was learned that to increase the gold reserves of the central bank, gold produced from ore in Turkey will be converted into standard unprocessed gold and quoted on the stock exchange, and then the central bank will be provided with priority purchasing rights.
The gold reserves of the central bank, which currently stand at around $17.2 billion, will increase over time with this project.
Interpreting the decision of the central bank as a "cunning move" to increase reserves and stressing that it will be a very positive development, bankers pointed out that normally the central bank gives foreign exchange for gold reserves and buys gold from abroad; but now, it will receive gold from domestic resources for its reserves in the Turkish lira. Bankers also stressed that gold is preferred rather than dollarization, which is seen as a distinct advantage.
With the communiqué published in the Official Gazette, articles related to the processing of gold and precious metals other than gold were amended.
According to the communiqué, gold produced from ore in all kinds and shapes will be refined in refineries established in Turkey, converted into standard unprocessed gold and delivered to the Custodian Bank within seven working days. Gold delivered to the stock exchange will be traded on the relevant market of the stock exchange.
CBRT to be market's first buyer
Bankers said that with the said amendment, the new customer of the gold mining sector in Turkey would be the central bank. Pointing to the importance of giving the priority purchasing right to the central bank in the amendment, bankers indicated that with this amendment, the central bank will use or not use the purchasing right in accordance with the situation of gold prices and that the bank will have strengthened its reserves during periods when prices seem to be low.
Meanwhile, bankers also underlined that annual gold production figures in Turkey will not affect the central bank's monetary policy.
Annual gold production of 25-30 tonsSector representatives noted that annual gold production in Turkey is 25-30 tons, which corresponds to about $1 billion-$1.2 billion. On the other hand, sector representatives claimed that the central bank could get gold at a more affordable price in the new period. Experts also indicated that with this practice, all gold produced in Turkey will be presented to the central bank as the first buyer after being refined and converted to standard gold and delivered as gold bullion if the bank exercises its purchasing right.
According to Habertürk's report, it was learned that to increase the gold reserves of the central bank, gold produced from ore in Turkey will be converted into standard unprocessed gold and quoted on the stock exchange, and then the central bank will be provided with priority purchasing rights.
The gold reserves of the central bank, which currently stand at around $17.2 billion, will increase over time with this project.
Interpreting the decision of the central bank as a "cunning move" to increase reserves and stressing that it will be a very positive development, bankers pointed out that normally the central bank gives foreign exchange for gold reserves and buys gold from abroad; but now, it will receive gold from domestic resources for its reserves in the Turkish lira. Bankers also stressed that gold is preferred rather than dollarization, which is seen as a distinct advantage.
With the communiqué published in the Official Gazette, articles related to the processing of gold and precious metals other than gold were amended.
According to the communiqué, gold produced from ore in all kinds and shapes will be refined in refineries established in Turkey, converted into standard unprocessed gold and delivered to the Custodian Bank within seven working days. Gold delivered to the stock exchange will be traded on the relevant market of the stock exchange.
CBRT to be market's first buyer
Bankers said that with the said amendment, the new customer of the gold mining sector in Turkey would be the central bank. Pointing to the importance of giving the priority purchasing right to the central bank in the amendment, bankers indicated that with this amendment, the central bank will use or not use the purchasing right in accordance with the situation of gold prices and that the bank will have strengthened its reserves during periods when prices seem to be low.
Meanwhile, bankers also underlined that annual gold production figures in Turkey will not affect the central bank's monetary policy.
Annual gold production of 25-30 tonsSector representatives noted that annual gold production in Turkey is 25-30 tons, which corresponds to about $1 billion-$1.2 billion. On the other hand, sector representatives claimed that the central bank could get gold at a more affordable price in the new period. Experts also indicated that with this practice, all gold produced in Turkey will be presented to the central bank as the first buyer after being refined and converted to standard gold and delivered as gold bullion if the bank exercises its purchasing right.