Gold bars
Gold bars Reuters

Turkey seems to have found a treasure trove of "hidden gold" to give its economy a much needed fillip during these trying times.

100 tonnes of "hidden gold" put back into Turkish economy

According to a report in Turkey's Daily Sabah news, Turkish banks and gold refineries have helped put over "100 tonnes of gold hidden in people's homes" back into the country's financial system. But there is still around 3,000 to 5,000 tonnes of gold "stashed under people's mattresses," the report cites a leading gold refinery in Turkey as saying.

The CEO of the Istanbul Gold Refinery, Ayşe Esen said they had launched a collaborative project with 12 major commercial Turkish banks about 10 years back to change people's gold saving habits and to prevent them from hoarding the precious metal in their homes.

3,000 to 5,000 tonnes of gold still stashed under people's mattresses

"We are aware of the fact that there is around 3,000 to 5,000 tons of gold saved under mattresses, which amounts to an informal economy with a size of $200 to $300 billion," the reported quoted Esen as saying.

"Putting this amount of gold back into circulation could bring solutions to many of the country's financial problems," she added.

The report cited Esen suggesting that the Istanbul Gold Refinery would begin working on several new projects with local banks in concert with the Erdogan government to push individuals to put their gold savings in banks as soon as the economy emerges from the coronavirus pandemic.

Turkish gold hoarding

For years, many Turkish people have been traditionally hoarding gold inside their homes as a form of security for hard times instead of opting for products and other savings options offered by banks - a reason why Turkey has one of the lowest private savings rates among the major economies in the developed world.

According to estimates, the Turks hold some 3,500 tonnes of gold in personal savings and banks have decided to cash in on the tradition by offering accounts denominated in gold.

Turkey starts issuing gold bonds and certificates

The Turkish Treasury and Finance Ministry has reportedly issued gold bonds and certificates for more than 15 tonnes of the precious metal on Wednesday, April 22.

The Ministry announced in an online statement that it has collected around 8,700 kilograms of 995/1000 purity gold for gold bonds and around 6,700 kilos for lease certificates. It said that a 0.75 percent semi-annual lease rate or interest will apply to the bonds and certificates, which will be settled on Friday, April 24 and mature nest year on April 16, 2021.

The treasury issued certificates in return for gold bars weighing a minimum of one kilogram, according to an Anadolu report.