According to reports citing Reuters, Turkey's gold reserves have sharply decreased by nearly 120 tons over the past two weeks in response to energy supply shortages triggered by Middle Eastern conflicts and pressure from the depreciation of the Turkish lira. This marks the largest two-week decline since records began in 2013.
Data released by the Central Bank of Turkey on the 2nd shows that during the week ending March 28, the country's gold reserves fell by 69.1 tons, bringing the total reduction over the past two weeks to 118.4 tons. This has lowered Turkey's total gold reserves to 702.5 tons.
Insiders revealed that of the gold reserves reduced last week, approximately 26 tons were sold, while another 42 tons were used in swap transactions. The essence of swap transactions is "exchanging gold for foreign currency with redemption upon maturity"—meaning the central bank transfers gold to a counterparty in exchange for an equivalent amount of U.S. dollars, while simultaneously signing a forward contract to repurchase the gold at a slightly higher price in the future. This is a form of short-term financing and does not represent a permanent liquidation.
Analysts suggest that Turkey's primary objective with this move is to stabilize its national currency. Since the outbreak of conflict in the Middle East, global energy prices have surged significantly. Turkey, which is highly dependent on energy imports, faces increased pressure on foreign exchange payments. At the same time, rising market risk aversion has put downward pressure on the Turkish lira, compelling the central bank to intensify intervention efforts to support the lira's exchange rate and enhance market liquidity.
Since the U.S.-Israel strikes on Iran ignited Middle Eastern hostilities, international gold prices have experienced sharp fluctuations. As of the latest closing, spot gold was quoted at $4,675.99, down 1.73%.
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