Turkey gold reserves tumble nearly 120 tonnes in two weeks, data shows

The Turkish Central Bank’s gold reserves dropped by 69.1 tonnes to 702.5 tonnes last week, data showed on Thursday, bringing the fall in the last two weeks to more than 118 tonnes as authorities seek to blunt market fallout from the Iran war.

It was the largest weekly decline in Turkey’s international standard gold reserves since at least 2013, when the central bank began publishing data, and reflects the bank’s decision to sell or swap gold reserves for lira and forex to generate funds.

Separately, according to calculations by three bankers, last week’s data showed that some 26 tonnes of the gold was sold by the central bank, while some 42 tonnes were used in swap transactions. The central bank did not comment on these calculations.

The gold reserves had fallen by 49.3 tonnes in the previous week.

The central bank has leaned on gold reserves, and also heavy sales of foreign currency and other measures, to support the lira currency and boost market liquidity as war fallout sent global energy prices soaring.

Before attending investor meetings in London this week, Central Bank Governor Fatih Karahan defended using such gold-backed transactions when forex liquidity needs to be supported.

He told state-owned Anadolu Agency that the central bank is pursuing a “proactive, flexible, and controlled” approach to its reserve-management and liquidity tools.

(By Can Sezer, Nevzat Devranoglu and Daren Butler; Editing by Jonathan Spicer)